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Myanmar’s CMP (cut, make and pack) garment factories are struggling due to the lack of orders from the European Union, says Myanmar Garment Manufacturers’Association (MGMA).
In January, the majority of clothing factories were forced to stop running overtime due to dwindling stocks. Around 90 percent of supplies came from China, which were blocked because of coronavirus, and the rest came from Indonesia, Vietnam, Thailand and South Korea.
Many factories have reduced working hours and cut jobs, while some have permanently or temporarily shut down. Some factories have not received orders or even price enquiries since March.
Many clothing shops across Europe have closed and the demand from Japan has declined by almost half, he said. Without new orders, many factories will be forced to reduce their workforce and working hours, and close either temporarily or permanently.
International closures have removed 50 percent of market demand for Myanmar’s clothing, handbags and footwear, according to the MGMA. Garment exports are mainly shipped to the EU, Japan and South Korea and the country earned over $4.5 billion (6.2 trillion kyats) from the sector from Oct 1 to July, according to the Commerce Ministry.
Export revenues are down $65 million (90 billion kyats) compared to the same period a year earlier, mainly due to COVID-19.
Brands and retailers can join the US Cotton Trust Protocol, a new system for responsibly grown cotton that will provide annual data for six areas of sustainability in line with the U.N. Sustainability Goals.
This year-over-year data, available for the first time, will allow brands and retailers to better measure progress towards meeting sustainability commitments.
The Trust Protocol verifies sustainability progress through sophisticated data collection and independent third-party verification. By working with Field to Market: The Alliance for Sustainable Agriculture and Control Union Certifications North America, the Trust Protocol enables brands and retailers to better track the cotton entering their supply chain. Brands who become members of the Trust Protocol will have access to aggregate year-over-year data on water use, greenhouse gas emissions, energy use, soil carbon and land use efficiency.
The Trust Protocol complements existing sustainability programs and is designed to fit the unique cotton mass-growing environment of the United States. Last month, the Trust Protocol was added to Textile Exchange’s list of 36 preferred fibers and materials that more than 170 participating brands and retailers can select from as part of Textile Exchange’s Material Change Index program.
PETA’s highlighting of gross misconduct at the world’s largest privately-owned alpaca farm in Peru, has led Japanese fashion titan Uniqlo to ban the use of alpaca wool from its collections. Undercover work by animal rights group PETA showed how workers at the Mallkini site slammed alpacas onto tables and tied them to stretching devices as their legs were all but torn from their sockets.
PETA continues to work relentlessly within the fashion and textile industries, enforcing its will in a bid to banish animal-based product from apparel and accessories. The organisation has minimal shares in leading brands including Ralph Lauren, Burberry, Urban Outfitters and Guess, and does so with the sole purpose of gaining a seat at annual meetings. The campaign group spotlights on the fashion’s need to clamp down on animal mistreatment within their supply chains, as culpable sites only exist due to the continued backing and custom of brands.
Munir Deyyeh, President, Jordan’s Textile and Readymade Clothes Syndicate urged the government to issue defense laws to minimize the financial burdens on the industry. The syndicate also urged the government to waive three months rent that each merchant had to pay to their landlords. It also sought a reduction in sales tax from 16 to 8 per cent to encourage people to buy clothes ahead of the upcoming Eid Al Adha holiday.
In April, the government announced its decision to reopen garment and footwear shops with the condition of sales through delivery only, but after complaints from the sector, direct sales were allowed with conditions such as sterilizing stores, requiring shoppers and workers to wear masks and gloves and prohibiting the use of fitting rooms.
The syndicate expects the clothing and footwear sector to benefit from the next Eid holiday and the government's positive interference will further boost the industry.
During the pandemic, denim mills in Pakistan are coming together as colleagues rather than competitors to chart a course forward, noted A Carved in Blue panel of Pakistani denim mills.
The panel noted in these challenging times, mills are investing heavily in both environmental and social initiatives. They are cutting back on their environmental footprints through reduced water and energy consumption and sustainable materials and dyes. According to Rashid Iqbal, Naveena Denim Mills, in future, their agility and speed to market will help Pakistan secure more orders. However, these mills need to make more investments in marketing, said Max Del Lago from Artistic Fabric Mills.
Manufacturers will also have to be more transparent and demand ore accountability from their suppliers, opined Hasan Javed from Artistic Garment Industries.
Italian fashion brands like Salvatore Ferragamo, Prada, Gucci, Louis Vuitton and Chanel have raised prices for their apparels to stem a fall in revenues and profits due to a slump in demand during the coronavirus crisis. Ferragamo has raised prices of its luxury goods by around 5 per cent Through this move, the brand aims to mitigate the contraction in store traffic and the increase in logistics and retail management costs caused by the pandemic.
Similarly, Prada has also hiked prices by a single-digit percentage two weeks ago. These Italian brands were further joined by rivals such as Gucci, Louis Vuitton and Chanel, which also increased its price lists to limit the impact of the lockdown measures and of the slowdown in tourist traffic caused by the epidemic, which are severely affecting results of the whole industry.
With India-EU summit, European Union Ambassador to India, Ugo Astuto reinforced his belief in India’s capability to play an important role in the post-COVID world and the future of global supply chain. Astuto advised European companies to focus on diversifying their supply chains and supply chain sources rather than on-shoring.
Another EU official said India needs to resist protectionist measure and ensure access to supply and value chains. The envoy emphasized that economic cooperation, multilateralism and post-Covid response will be in focus at the summit. The summit will broaden the agenda of cooperation from maritime security to connectivity and research innovation, he said.
In the summit, the two sides are also expected to delve into finding a way forward to resume talks on the long-pending free trade agreement (FTA) which is known as EU-India Broad-based Trade and Investment Agreement (BTIA).
Cambodia's garment industry has issued a renewed plea for help amidst new statistics revealing that more than 150,000 workers have now lost their jobs during the pandemic. Factory owners and trade unions both called on the government, and other agencies, to support the industry and former garment workers who were facing abject poverty.
The Garment Manufacturers Association of Cambodia (GMAC) has demanded the suspension of annual minimum wage negotiations to relieve pressures on factory owners, although this is opposed by trade unions. The GMAC has also urged the International Labor Organization (ILO) and European brands to support its call for the European Commission to postpone for one year its decision to partially withdraw Cambodia’s 'Everything But Arms' (EBA) trade privileges to allow the industry time to recover from the economic downturn.
The Cambodian Confederation of Unions (CCU) urged the Prime Minister to intervene and provide money to workers more quickly to provide them with desperately needed financial support. In an open letter, CCU claimed that workers had only received $20 from the government after their work was suspended for more than two months.
Administrators of collapsed clothing companies Seafolly, PAS Group and TM Lewin have received dozens of expressions of interest from potential trade, private equity investors and private buyers from Australia and overseas despite the uncertain outlook for the clothing and footwear sectors. More than 50 potential buyers expressed interest in buying swimwear brand Seafolly, which went into voluntary administration this month after its private equity owner L Catterton Asia withdrew its stake
The administrators of women’s wear retailer PAS Group, which collapsed in May, received more than 30 expressions of interest and more than a dozen indicative offers for its assets, which include the Review, Black Pepper, Yarra Trail and Jets brands, and a contract design and manufacturing business, Designworks. Buyers also approached the administrators of shirt and suit company TM Lewin, which appointed Colby O’Brien, Stewart McCallum and Adam Nikitins of EY as administrators this month after the collapse of its British parent due to the coronavirus crisis.
While PAS Group and Seafolly were struggling before the pandemic, TM Lewin's administrators blamed the retailer's collapse on the drop in foot traffic in the CBD as most people worked from home during the pandemic.
A report by Fitch Solutions predicts Cambodia, Myanmar, and Vietnam to gain most from shifts in apparel manufacturing. The report says, China’s reduction of apparel manufacturing operations creates new opportunities for its neighboring countries to expand their presence as suppliers to China, and grow their market share in North America and Europe at China's expense.
Vietnam has already benefitted by signing free trade agreements during the trade war between the US and China. As a result, the country’s apparel exports jumped 30 per cent and raised its global apparel exports share to 8.7 per cent in 2019, up from 6.8 per cent in 2018.
Similarly Cambodia can also benefit as its apparel manufacturing sector has grown at a compound annual growth rate of 13 per cent over the last decade, with relatively low labor costs and favorable investment policies -- including allowing full foreign equity ownership in the textile sector -- expected to continue supporting this.
Being able to use Vietnamese shipping ports also helps Cambodia with transport and import of raw materials from China. Myanmar is also expected to continue seeing strong growth in low-value and lower-quality basic garments with numerous seaports that facilitate shipping at one of the cheapest rates in the region.
