FW
Vietnam has become the biggest exporter to the United States in the Southeast Asian region with a record trade surplus of almost $25 billion in 2014, surpassing even Malaysia and Thailand. The two-way trade reached $36.3 billion, of which Vietnam exported $30.6 billion worth of goods to the US in 2014 while its imports were only $5.7 billion.
The figures show an increase of 24 per cent in export and 13.6 per cent in import compared with the previous year. Ending 2014, Vietnam enjoyed a trade surplus of $24.9 billion with the US, the highest-ever value since the two countries normalised relations.
Export of garment and textile was the main contributor in Vietnam's success with an export value of nearly $10 billion, accounting for one-third of the country’s total export value. Vietnamese textile also raised its market share in the US to 9.26 per cent.
Vietnamese textile and garment enterprises are expecting the Trans-Pacific Partnership, if ratified, will boost their exports, especially to the US as import tax will be reduced to 0 per cent from the current rates of 16 to 32 per cent. Presently, Vietnam relies to a great extent on Asian countries like China, Taiwan and South Korea for its input materials.
Union Finance Minister Arun Jaitley presented Budget 2015-16 on February 28 in Parliament. It is being touted as a major step to boost the economy, but critics feel it misses out in chalking out the real action plan and any supportive measures for the textile industry. The focus is clearly on the corporate sector which was doled out 30 percent reduction in corporate tax over the next four years. However, there is nothing to cheer the apparel and textile industry per se.
Misses industry expectations
Expressing disappointment over the reduction in TUFS allocation, Confederation of Indian Textile Industry (CITI) chairman Prem Malik said, “Payments under the scheme were pending for the last three quarters and the provision had to be doubled to disburse the pending amount. Reduction in allocation for the scheme would not encourage investment in the sector. The hike in service tax would also have an adverse impact on the textile industry.”
Experts feel Budget 2015 is disappointing for the textiles sector, because their recommendations have gone unheard. The industry had high expectations from the government’s growth oriented agenda. Being the most labour-intensive industry in the country employing over 35 million rural workers directly and contributing over 17 percent to the country’s industrial production, the sector was expecting some encouragement for improving production efficiency.
As DK Nair, Secretary General, Confederation of Indian Textile Industry says, “In view of the social and economic importance of this sector, the government has included textiles industry as an important component in the ‘Make-in-India’ program. However, with little help from the Budget, the industry will find it impossible to play its legitimate role in the country’s economic development since there is no specific mention of the textiles sector in the Budget.”
“The textiles industry has been making serious efforts to diversify into manmade fibre-based products to rectify the mismatch between global demand and domestic production in terms of fibre mix. The industry had requested for a significant reduction in the duty burden on man-made fibres in order to help this process. However, the duty burden on man-made fibres has only been hiked further in the current Budget. Apart from labour intensity, export orientation is another important feature of the textiles industry. However, the Budget has not addressed any export related issues either, for this sector,” asserts Nair.
During the interim Budget presented by Jaitley on July 10, 2014, he did not mention Punjab while announcing eight textiles mega clusters at Varanasi, Bareilly, Lucknow, Surat, Kutch, Bhagalpur, Mysore and Tamil Nadu with an investment of Rs 200 crores. Malwa region's cotton farmers and traders expected him to fulfill Prime Minister Narendra Modi’s election promise in the current Budget. However, there was no such announcement. "We were expecting a textile park in Malwa region, but the finance minister has paid no heed to formulating a policy to promote textiles. It is very disheartening. This government has done nothing to provide any relief to cotton textile industry," said Punjab Cotton Factories and Ginners Association president Bhagwan Das Bansal.
A few positives for the textile sector
A positive aspect of the Budget, as far as the textiles sector is concerned, is that the optional excise duty structure has been continued. “Considering the fragmented and highly scattered nature of this sector in the country, the industry had made a specific request that this facility should be continued until the introduction of GST. Continuation of this facility under the current Budget will help the industry to prepare for completing the procedural and logistical requirements for adapting itself to the GST framework expected to be introduced from the next fiscal,” Nair adds.
T Rajkumar, Chairman, The Southern India Mills’ Association (SIMA) welcomed the Union Budget and said, “The Budget has marked a good beginning to achieve the ‘Make in India’ vision of the Prime Minister.” He thanked the government for extending the optional Cenvat route for cotton textiles and also for the announcement of implementing GST. He, however, appealed that the Centre to reconsider certain major demands of the textile industry like removal of import duty and reduction of central excise duty on man-made fibres, allocation of adequate funds for the ongoing and all the pending cases of Technology Upgradation Fund Scheme and removal of central excise duty on shuttleless looms.
“The nine months old government has taken several long term initiatives to attract investments and create a conducive environment to make India, a hub for the manufactured goods and services. Huge plans on infrastructure developments including one lakh kilometer road, five mega power projects each with 4000 MW capacity, commencing the operation of second plant in Kudankulam Nuclear power plant, development of minor ports, plug and play approval facilities, reduction of corporate tax by 30 percent over the four years, road map for implementing GST with effect from April 1, 2016 and making EPF and ESI optional are certain measures which would facilitate and give enough confidence for investors in the manufacturing and service sectors, said K Selvaraju, Secretary General, SIMA, on a positive note.
The Indian Chamber of Commerce (ICC) and the India-Bangladesh Chamber of Commerce and Industry (IBCCI) will jointly work on the possibility of an Indo-Bangla industrial park near the border. Setting up of a joint industrial park with a thrust on textile and readymade garments would be high on the agenda of business cooperation between ICC and IBCCI.
ICC and IBCC will jointly conduct a study to identify the sectors where joint investment is possible. Bangladeshi companies are still not allowed to invest abroad because of foreign exchange constraint. Now the Bangladesh government has decided to relax this once the forex reserve reaches $25 billion. Currently, the Bangladesh forex reserve is at $23 billion.
The idea of collaboration between India and Bangladesh was mooted during the India Show organized by FICCI in Dhaka in 2012. The industry body had said that India and Bangladesh can join hands and act as a block in textile and garments. A national committee member of FICCI had also argued that India and Bangladesh can complement each other in this field.
ICC has also requested the Bangladesh government to set up a consular office in the north-east to expedite trade between the north-east and Bangladesh.
In 2014, the European Union's apparel and textile imports saw an increase of nine per cent and eight per cent respectively. Exports increased by five per cent for apparel and two per cent for textiles.
Last year, apparel imports accounted for €73.06 billion worth of goods, including €54.9 billion from Asia (10 per cent) and €14.02 billion from Mediterranean countries (five per cent). Textile imports totaled €26.4 billion euros, including €16.8 billion from Asia and €5.6 billion from the Mediterranean countries.
Apparel exports, on the other hand, accounted for €21.9 billion euros, including €5.2 billion for Asia and €1.9 billion for the Mediterranean countries. In terms of textiles, Europe reached €21.2 billion in exported goods, including €4.8 billion to Asia and €4.8 billion to the Mediterranean.
EU textile and clothing imports rose in value in 2013 following a decline in the previous year and, as a result, imports remained short of the peak reached in 2011. In volume terms, imports rose faster but remained below the levels reached during 2007-08 and 2010-11. More than 70 per cent of EU imports of textiles and clothing come from Asia. The United States is the world’s biggest textile and apparel market.
The jute industry has demanded imposition of a countervailing duty on jute imports from Bangladesh. Indian jute manufacturers have raised the demand ahead of the Union Budget to counter surging imports from Bangladesh that have grown 35 per cent in the April-December period of this fiscal.
Over the same period, domestic jute bag manufacturers cut production by more than 25 per cent. The main complaint is that there is zero duty on import of jute goods from Bangladesh, thereby creating a non-level playing field between jute manufacturers of India and Bangladesh.
The industry has also urged the government to expedite the use of jute geo-textiles in at least 15 per cent of the road construction program, as using this product in about 200 projects has been found to be beneficial and cost effective in road construction, river bank protection as well as hill slope stabilization.
Mills estimate it’s possible to reduce the cost of jute bags supplied to the government for food grain packing by as much as 30 per cent over the next two to three years through technological upgradation of jute mills and product redesigning. They say if market stability is provided by the government to the industry for sacking, jute mills would be able to increase the share of value added jute products from the current two per cent to seven to eight per cent in the next five years.
Shanghai Tex will be held from June 15 to 18, 2015. This edition will see an expansion of digital printing machinery zone showcasing latest digital printing technology and create a trendsetting direction for low carbon and a green future. Exhibitors in the zone include: Epson, Zimmer, Kornit Digital, Fujifilm, Reggiani, Toshin etc.
The three-day forum includes activities such as technical seminars, a fashion show and product showcase, where visitors may experience the business potential of digital printing from multiple perspectives. Shanghai Tex is also cooperating with Shanghai University of Engineering Science and holding a textile design contest.
Utilising latest digital printing technology, young designers’ conception and ideas will be actualized and young designers will also be able to experience power of the most advanced digital printing technology.
Digital printing has witnessed a boom in recent years. As an emerging high tech industry in the international market, digital textile printing promises extensive applications. It has an edge over traditional printing in environment-friendly production, product diversity, small batch production and product customization.
Global digital printing output is expected to reach 10 per cent of total textile printing output and the installation base for digital printing equipment will hit 50,000 machines.
www.shanghaitexonline.com/
SDC Enterprises has combined its extensive knowledge of fabric quality control, textile testing, dyeing and continuity of technical performance in test materials to develop a range of verification fabrics to improve the controls available to organisations involved in textile testing. Use of these fabrics will provide a simple and effective way for laboratories, either test houses or manufacturers in-house facilities, to implement verification or control procedures for their testing. The verification of the consistency of lab results can be assessed, over time, or between labs, technicians and pieces of equipment. The range can also be a useful addition to the assessment and training of technicians, or they can be used as control fabrics to ensure test procedures are conducted correctly or equipment is performing as expected.
All the fabrics have been manufactured and dyed or finished in the UK under the complete control of SDCE to guarantee future reproducibility and traceability. Each fabric has been tested repeatedly throughout the batch to ensure test results are identical whatever the quantity or frequency of purchase. This testing will be repeated over time to ensure users can safely benefit from verifying the same test over extended periods of time.
Also available to retailers and organisations running accreditation schemes is a similar range of correlation fabrics. While these fabrics cover the same test methods as the verification range, instead of the long-term continuity of results these products will vary by batch ensuring different results and traceability for individual accreditation schemes.
www.sdcenterprises.co.uk/
Kanoria has set up a new denim fabric plant in Ethiopia with an installed capacity of 10 million meters of fabric per year. The factory will employ 600 people and produce both yarn and denim for textile and garment factories.
The products will be sold in Ethiopia and African, Asian and South American markets. Established with an extimated capital of $35 million, Kanoria will use cotton procured from local markets and imported from India and Pakistan. The new denim factory is beneficial in terms of transferring technology advancements and knowledge to the country, saving foreign currency, meeting the high demand for denim fabric and creating employment opportunities.
Kanoria Chemicals and Industries is a leading manufacturer of chemical intermediates in India. The company obtained an investment license two years ago. In Ethiopia, there are 130 medium and large-scale textile and garment factories, of which 37 are owned by foreign investors while the remaining are owned by domestic investors.
Ethiopia's textile and garment sector has been a poor performer over the past years, with one of the major problems being the poor supply of cotton, and others being poor planning and management.
www.kanoriachem.com/
Aiming to making unemployed rural women self-sufficient, and enabling them to earn a sustainable livelihood through garment production, the Aditya Birla company Utkal Alumina has opened a garment manufacturing unit at Tikiri in Rayagada district of Orissa. The company has already imparted tailoring training to 60 women from the underprivileged class in its periphery. Around Rs 33 lakh have been invested for the project.
The market linkage would be with Fabindia, Boyanika and similar large scale garment units. The product portfolio includes women’s tops, kurtis, chudidars, salwar kameez, skirts, school uniforms and institutional uniforms for hotels, hospitals and industries.
Aditya Birla is a dominant player in viscose staple fiber, metals, cement, branded apparel, financial services and other sectors. It spans over 20 nations with 100 state-of-the-art manufacturing units. Utkal Alumina is a refinery project in Rayagada district.
www.hindalco.com/utkal-alumina
Huge losses are being reported by owners of silk handlooms makers in different villages of Sadar and Shibganj districts of Bangladesh due to the ongoing blockade enforced by BNP-led alliance since January 6. This has resulted in temporary joblessness for hundreds of handloom workers. An owner from Laharpur village in Sadar has stated that his business had virtually stopped due to the blockade and he suspended production. Over 250 other handlooms at the village also stopped weaving. Owners who have taken loans from banks and NGOs are now worried about timely payments.
Workers, who usually earn Tk 250 to 300 a day for weaving silk, have reported difficulties in running day to day life due to the country-wide blockade. Around 2,500 weavers work at as many handlooms in the district, said an office-bearer of the Baroghoria union weavers association. Elaborating further, he said that wholesalers from different places cannot come to the district for buying clothes including saris, scarves, shirt, kurta pieces, and curtains due to the blockade. Weavers cannot send the items either.
