FW
The garment and textile industry in Vietnam has begun understanding the needs and concerns of its workers. The industry is investing significantly in improving the welfare of workers so as to develop and sustain a productive and quality workforce. This covers safety of workers, food and transportation and providing minimum wages.
While some companies endorse the concept of zero overtime to ensure that all workers go back home on time, others ensure workers earn well through overtime. The objective in both cases is to provide a better life to garment workers. However, zero overtime can be achieved only with good planning and if factories are well organized.
Social insurance is being worked upon seriously by companies. Apart from routine medical check-ups for employees, they also pay social insurance. An increase in social insurance coverage would boost employee morale and enhance their productivity. The social protection floor means each member of the society will be protected in terms of healthcare, and basic income security for children, and for people who are in active age but are unable to earn sufficiently, and the elderly.
Vietnam has set a target of having 50 per cent of its workforce (across all industries) covered by social insurance by 2020. Nearly three million old-aged people now have pensions.
IN a statement from the Interfaith Center on Corporate Responsibility (ICCR), around 153 global investors have urged for the continuation of the Bangladesh Accord for Fire and Building Safety until it completes its mandate and the government agencies are able to assume responsibilities. The statement was organised by the Bangladesh Investor Initiative, a coalition of global investors that coalesced in response to the tragic collapse of the Rana Plaza building outside Dhaka in 2013.
Investors are concerned Accord's precipitous termination will not only put workers at great risk but also threaten brands and investors reliant on a secure, safe workforce. They urged the government to make a re-submission to the High Court to enable the Accord to operate until a national safety regulatory body is established and fully prepared to assume control of the Accord's mandate.
The government, Accord companies and unions and the BGMEA agreed to form a Transition Monitoring Committee (TMC) to evaluate the government's readiness to take on the duty to protect the safety of garment factory workers. The parties agreed that only when the criteria established by the TMC were met would the Accord then initiate a six-month process of winding down its operations.
As per reports, levying of additional tariffs by President Donald Trump on Chinese products has prompted the Chinese government to decline the offer of talks. Chinese and American officials have held a series of talks over the dispute, and reached at least one agreement which was subsequently abandoned by the President. The lack of progress and collapse of that deal have made future negotiations more difficult, as it’s unclear who speaks for the US administration and there’s a lack of confidence that any deal will be honored.
It isn’t prepared to negotiate with a “gun pointed to its head. The Chinese officials are also considering potential retaliation steps and has already detailed thousands of U.S. items that it would levy extra tariffs on if the $200 billion threat is carried out.
Some Chinese officials advising the leadership are proposing to step up the trade fight a notch by restricting China’s sales of materials, equipment and other parts key to US manufacturers’ supply chains. Such restrictions could even apply to Apple Inc.’s iPhones, which are assembled in the mainland.
At the Dalian International Garment and Textile Fair, manufacturers like Liang Zhouye's company – specialising in swimsuit fabric – are looking to avoid extra taxes on their US exports. Manufacturers like Liang Zhouye's company – specialising in swimsuit fabric are trying to relocate some of the production facilities to other countries and export the finished goods from there to avoid possible tax increases. However, products like furs and leather in China however still heavily rely on local materials.
The tit-for-tat trade war and possible expansion of trade barriers could result in some companies relocating their manufacturing bases to Vietnam, Bangladesh and elsewhere. And regardless of tariffs, for Chinese fashion and textile enterprises today, it's an uphill climb to the top of the food chain. Dayang Group in Dalian is negotiating with foreign partners to withstand the extra overhead caused by possible tariffs.
As per latest OTEXA figures, Vietnam saw an increase in exports of skirts, men & boys (MB) jeans and women & girls (WG) jeans and denim apparels. The WG jeans category contributed the most with an export value of $102.25 million, while MB jeans export fetched $43.29 million. Both these categories grew in terms of volume as Vietnam shipped WG jeans worth 956,969 dozens to the US, whereas shipment quantity of MB jeans was 386,506 dozens during the period under review.
Exports of denim skirts from Vietnam to the US escalated 269.41 per cent to hit $2.71 million. Percentage-wise growth is massive though the export value is just 8.66 per cent to that of total import value of US in this category.
In the first seven months of 2018, Vietnam exported denim apparels worth $148.67 million, registering a growth of 37.84 per cent over the corresponding period of prior year. The country registered highest percentage-wise growth in denim apparel exports among top ten exporters in this segment to the US. Further, in volume-terms, exports increased 21.16 per cent and, Vietnam shipped 1,373,085 dozen of denim apparels from January to July this year.
Tirupur’s exports of readymade garments fell by 12.12 per cent from April to August compared to the corresponding time period last year. The year started with a 22.78 per cent drop in April. But exports clocked in 5.03 per cent growth in rupee terms. Exports in August 2018 grew 5.08 per cent compared to August 2017.
GST, reduction in duty drawback, and remission of state levies were responsible for export trends. The trend is expected to reverse this financial year. Exporters fear if this doesn’t happen, buyers will turn to Bangladesh, Vietnam, Ethiopia, Myanmar and once this happens bringing them back will not be easy.
Meanwhile the rupee’s continuous fall against the dollar will help exporters’ as it will narrow the price difference between Made-in-India textiles and competing nations, including Vietnam, Cambodia and Bangladesh. The development comes at a time when exporters are going to finalise agreements for the next set of orders. The gap between Tirupur and competing countries would be reduced by around two or three per cent. Currently, the gap ranges between 10 and 15 per cent.
India topped among the countries exporting children’s wear to the US between January to July 2018. India’s export earnings in the period grew 1.50 per cent and volumes grew 19.87 per cent. During the seven-month period, US volumes of junior wear imports grew 3.07 per cent while values were up 1.76 per cent from the same period of the prior year.
India is the only country that saw a surge in both volumes and value terms, surpassing China, Bangladesh, Vietnam and Indonesia as far as percentage growth is concerned. Bangladesh and Vietnam, India’s close competitors in the children’s category, fell in value terms and grew in volumes but stayed far behind the growth tapped by India. While Bangladesh’s earnings were down two percent, Vietnam’s export value fell 1.90 per cent from the previous year.
While Bangladesh’s volume of children’s wear exports to the US grew by 1.83 per cent, Vietnam managed to witness a decent growth of 5.29 per cent in exports of children’s wear. China’s volumes fell by 1.74 per cent and values of exports dipped 2.74; Indonesia too drastically noted a decline by 8.29 per cent in value and 10.12 per cent in volumes of junior wear exports to the US.
India has surpassed Sri Lanka in underwear exports to the US, from January to July 2018, a growth of 10.77 per cent during the first seven months of the year. Sri Lanka, on the other hand, was able to ship just $149.86 million worth of underwear, a fall of 16.07 per cent.
In volume-terms, India clocked in a growth of 2.87 per cent and shipped 10.21 million dozen of underwear during the period, whereas Sri Lanka declined massively by 21.86 per cent and could just ship 6.58 million dozen underwear in the US market.
India’s unprecedented growth can be attributed to various factors. India and Sri Lanka both export high-end underwear to the US, however India’s advantage was less unit prices than Sri Lanka’s which helped the country in surpassing both in volumes and values.
India’s unit prices were $18.11 per dozen, whereas Sri Lanka’s was $22.77 and in the present era where cost-competitiveness is at all-time high, the country with ‘low cost and high quality’ combination emerges as victorious and the same happened with India.
Nigerian President Muhammadu Buhari has secured a $2 billion loan to establish cotton plantation and textile factories in Abia, Kano and Lagos states. The new investment commitments coming into Nigeria’s textile sector, of which Aba is a major beneficiary, will be actualised within the shortest possible time. The proposed investment will create thousands of jobs for the vibrant and creative youths in Aba.
The President recently attended Forum for China-Africa Cooperation where he met executives of one of the largest cotton and garment companies in the world who will soon establish operations in Aba.
In June 2018, the Nigerian Electricity Regulatory Commission granted an electricity generation licence as well as a distribution licence for the market. This will enable the generation and distribution of 9.5 Megawatts of electricity within the market.
The Apparel Export Promotion Council (AEPC) has joined hands with the Ministry of Textiles (MoT), Government of India (GoI), to spread awareness on the importance of cleanliness through the campaign Swachhata Hi Seva (SHS) from September 15 to October 2, 2018.
The council has kicked off the campaign with a camp at AEPC’s Okhla office. The campaign was inaugurated by
Union Minister of Textiles Smriti Zubin Irani in the presence of chairman of AEPC HKL Magu, heads of garment industry associations and industry members.
The Swachhata Hi Seva campaign stresses on shramdan. Towards this, a cleanness drive in the neighborhood of Okhla would be undertaken during this ceremony by the apparel industry.
