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"Even before COVID-19 stuck China, many fashion businesses were shifting their production to countries like Vietnam, Cambodia and Bangladesh. However, these countries rely heavily on China for raw materials and other unfinished goods and services. Once their stock imported from China is depleted, they may face the brunt of the supply disruption. As per United Nations Conference on Trade and Development in March, about 20 per cent of global trade in manufacturing intermediate products originated in China."
Even before COVID-19 stuck China, many fashion businesses were shifting their production to countries like Vietnam, Cambodia and Bangladesh. However, these countries rely heavily on China for raw materials and other unfinished goods and services. Once their stock imported from China is depleted, they may face the brunt of the supply disruption. As per United Nations Conference on Trade and Development in March, about 20 per cent of global trade in manufacturing intermediate products originated in China. European Union and Vietnam are expected to be the worst hit by the disruption in inputs for textile and apparel products.
Vietnam imports about 55 to 60 per cent of its garment raw materials from China. The country is a base for companies like the Hong Kong-listed Lever Style Corp, which manufactures for brands including Paul Smith and Hugo Boss. Although its factories are yet to experience any meaningful delays, it has not being able to find supply alternatives beyond China.
Similarly, Uniqlo-owner Fast Retailing Co is also exposed to the outbreak as over half of its sewing factories and
fabric mills are located in China and a quarter in Southeast Asia. Many of these sewing factories could face a serious shortfall of raw materials from April if shipments do not resume in March.
China to remain the preferred supplier
The situation highlights the challenges that manufacturers face in diversifying their supply chains. Unlike their Southeast Asian counterparts, South Asian countries such as India and Bangladesh have the entire value chain of textile products within their country. Therefore, in near future though apparel manufacturers may look at these countries for their supplies, China may still remain their preferred supplier once it recovers from the outbreak.
Trade policies to influence decisions
Their decisions may also be influenced by the current trade policies which have disadvantaged several local mills. The country has trade deals with countries like Indonesia and Vietnam while it lacks free trade deals with the European Union, Canada and Australia.
The spread of Coronavirus to Europe and other parts of the world is also likely to be a threat to bigger players such as Industria de Diseño Textil SA and H & M Hennes & Mauritz AB (publ). However, the two companies are relatively lesser exposed to manufacturing shutdowns in China as less than a third of their manufacturing facilities are located in the country. H&M also does not anticipate the coronavirus to delay to its supplies. The Swedish company has temporarily closed 41 of its more than 500 stores in China.
Greece-based yarn maker Varvaressos’ new premium cotton yarn collection saves water, is free of transgenic material and is totally traceable. The yarn maker has unveiled a new generation of smart cotton, created from an innovative and socially responsible system granting sustainability from the cotton seed to the garment, while supporting farmers and businesses. As a master in smart cotton science, the company has raised the bar by augmenting the skills and heritage of local farmers and businesses. The Supreme Green Cotton collection is aimed at matching the highest European and international standards, without compromising on quality. The collection meets the requirements for high-end garments, thanks to uniformity, superior strength, contamination-free and long-staple eco-fibers. The Supreme Green Cotton collection comes equipped with a QR code.
The yarn maker has developed a water-saving yarn range. With its expertise in water management, Varvaressos has customised a sustainable technology that reduces water consumption by 40 per cent. Thanks to the advanced drip irrigation system, plants are watered and fed without wasting water. Thanks to a custom-developed app connected via satellite and meteorological stations in selected cotton fields, farmers can monitor the fields in real time. Internet of Things advises them to take action for plants to flourish and have higher yields in a sustainable way.
The global textile finishing chemicals market is growing by 5.5 per cent. Increasing demand from various textile applications such as technical textile and home textile is expected to drive the market. In the global textile finishing chemicals market the softening finishes segment is the largest and the fastest-growing. Softening finishes assist textiles to attain softness, smoothness, flexibility, superior drape, and elastic properties. Moreover, softening finishes provide a refreshing fragrance as well as reduce the danger of germ invasion. These finishes reduce the wear and tear of apparel and also provide shape retention, which further fuels the demand for textile softener finishes in the market.
The pad-dry cure process is the largest and the fastest-growing process in the textile finishing chemicals market. It is a continuous high speed process that saves time and cost. Also, this process can be used on all kinds of textiles and on a variety of finishing chemicals. Thus this process is the most common process of application for textile finishing chemicals. The technical textile application is the fastest-growing application for textile finishing chemicals. These textiles possess unique and special characteristics. Technical textiles are largely used in non-aesthetic applications such as transportation, automotive, medical and personal hygiene, industrial, packaging and sports.
Swiss textile machinery companies made a major impact at Itme, Ethiopia, February 14 to 16, 2020. The attractive design of the Swiss Pavilion made a positive impression. Machinery and knowhow from Switzerland offered the innovative and quality-focused boost that these markets can utilise to raise their competitiveness and broaden their appeal to international customers. Yarn processing and winding technology specialist Schärer Schweiter Mettler exhibited at the show and got an opportunity to meet customers from Ethiopia and surrounding countries, enabling SSM to better understand the requirements of customers in the growing East African market. Steiger, the manufacturer of flat knitting machines, attended and introduced its products. Steiger saw participation at this exhibition in Africa as an investment for the future. During the three days of the fair, Saurer was able to conduct many exciting discussions with customers and is already looking forward to its next participation. Rieter had good discussions with existing and potential customers and could generate new leads. Among the other Swiss exhibitors were Benninger, Jakob Müller, Hunziker, Grob, Loepfe, Bräcker, and Graf.
Ethiopia and neighboring East African countries are increasingly viewed as fertile ground for technological and commercial developments in textile production. The region is widely viewed as an emerging option for global apparel sourcing.
Footfalls at Superdry’s shops in the UK and the US have reduced 25 per cent week-on-week, due to COVID-19 fallout of the virus. The UK market represents around 50 per cent of Superdry’s weekly sales and the US around ten per cent. Superdry has closed nearly 80 of its shops across Europe. These stores usually contribute around 40 per cent of the brand’s sales. E-commerce is making up for some of the shortfall. But the business does not seem to be in a difficult position as far as its funding is concerned. The company has a strong position on its balance sheet and its working capital performance to date has been better than its forecasts. It's continuing to work closely with wholesale partners to minimise returns and cancellation risks on spring/summer ’20 stock deliveries. It's also talking to landlords about store rental relief, postponing capital expenditure plans and making potential changes to the timing and structure of the future season stock buy. In addition, it’s talking to its existing lending group to provide additional flexibility and liquidity to support Superdry through this period of uncertainty. It's also pursuing cost saving measures across its business.
This premium British fashion brand has products like fragrances, body sprays and body plus hair washes.
Flat knitting machine manufacturer Stoll has collaborated with Woolmark on several projects. Stoll has supported Woolmark in launching the Woolmark Learning Center with images from various stitch constructions and items of clothing from the Stoll archive for the knitwear design and make module. The launch of this module is planned for spring 2020. The center has been developed to educate and inspire specialization within the wool supply chain. The educational platform offers an unprecedented level of knowledge transfer from industry experts within the global textile industry and is designed for students studying fashion, agriculture, science and textile engineering; designers, brands and retailers; and manufacturers of yarn, textiles and garments. The platform will work to unify the global textile supply chain.
Stoll helped Woolmark in transforming The Wool Lab, an inspirational tool dedicated to wool, into Wool Lab Vision. This is aimed at inspiring the fashion, textile and lifestyle industries. The Wool Lab Vision will change the way the industry works with wool. The Wool Lab Vision is in addition to the latest edition of The Wool Lab, dedicated to spring/summer 2021, and stays true to its original mission, providing brands and designers with a curated collection of the world’s best commercially available wool fabrics and yarns.
Sateri, the world’s largest producer of viscose fiber, has successfully produced viscose fiber regenerated from textile waste on a commercial scale. The high-quality new fiber uses a mix of dissolving pulp made from recycled post-consumer textile waste by the Swedish company Södra, and other PEFC-certified wood pulp.
Trialed at Sateri’s Linz Nanjng yarn spinning mill using two advanced technologies, Siro compact and Vortex, the new fiber has proven compatibility with existing spinning technologies, ensuring stable yarn production without the need to adjust existing processes or parameters. The fiber also has excellent spinning efficiency and delivers yarn evenness and tenacity.
Sateri’s breakthrough comes on the back of RGE’s announcement in October last year of a $200 million investment towards next-generation cellulosic fiber innovation. Sateri is working with several dissolving pulp producers using various innovative technologies to aid the push towards a circular bioeconomy. Sateri will be partnering yarn customers, garment manufacturers and fashion brands to market and officially launch this new recycled viscose fiber product in the coming months, with the eventual goal of making recycled fiber available to the mass market.
Swiss flat knitting machine builder Steiger is looking to spread out in the East African knitwear market. Ethiopia, with a population of more than 100 million and considered to have good potential for the mid to long term. Various foreign textile manufacturers have already installed production units in Ethiopia, with the attraction of low production costs. Ethiopia and neighboring East African countries are increasingly viewed as fertile grounds for technological and commercial developments in textile production. The region is widely viewed as an emerging option for global apparel sourcing. Machinery and know-how from Switzerland offers the innovative and quality-focused boost that these markets can utilise to raise their competitiveness and broaden their appeal to international customers.
Steiger is part of the Cixing Group, the world’s largest manufacturer of flat knitting machines. Steiger has also launched a new app, which will allow, for example, a Steiger machine user in Brazil to live link to a Steiger technical expert in Europe for assistance. The company launched the Stitch Lab in 2017, where experts in knitting and programming work together with clients on developing their future applications. In the Stitch Lab Steiger develops 3D articles for knitwear, for medical applications and for composite materials.
Pakistan’s exports to the European Union increased 62 per cent from 2013 to 2018. This has been made possible by the grant of GSP by the European Commission till 2022. But shipments to Europe and the US are being deferred or cancelled due to the coronavirus. The cash flow crisis is so severe companies are finding it impossible to maintain operations, resulting in bankruptcies and massive layoffs of workers. This is feared to lead to a buildup of inventory and non-payment against letters of credit. The industry in Pakistan is already cash strapped due to the sales tax system.
The country hopes to double textile exports over the next five years if the issues related to high energy pricing, gas connection and tax refunds are resolved. This implies continuation of supply of energy at competitive rates as a long term policy, slashing the interest rate to single digits, refunds of all sales tax claims and other dues of the industry and ensuring availability of cheap credit for the sector. With a long-term five-year textile policy, textile exports are expected to start growing at ten per cent to 15 per cent. The country’s production of cotton is estimated to be at 8.5 million bales.
Oerlikon has received large orders from leading manmade fiber manufacturers in China despite the pandemic. All these companies have been key customers of Oerlikon for many years. The orders are for Oerlikon Barmag’s filament-spinning technology for the efficient production of polyester fibers. On-site delivery and installation of these systems is planned for the period from 2021 to early 2023. Oerlikon’s innovative technologies will enable the three Chinese companies to increase their production capacities for polyester yarn and to remain competitive.
The systems business in China remains largely unchanged despite the short-term interruption caused by the coronavirus epidemic following the Chinese New Year celebrations. Globally interconnected industries such as the textile industry and business models like that employed by the manmade fiber segment are more robust than many people believe.
The comprehensive manmade fibers technology solutions by Oerlikon are used along the entire value chain in polyester yarn manufacturing and contain cutting-edge automation and digitalization technologies. Oerlikon offers the entire process chain, from the melt to the textured yarn or the fibers and including the necessary semi and fully automated logistics process, from a single source. Oerlikon is known for its brands Barmag, Neumag and Nonwoven. Using Oerlikon polycondensation and extrusion systems, manmade fiber companies manufacture polyester, nylon and polypropylene.
