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The proposed merger of Grasim Industries and Aditya Birla Nuvo(ABNL) is the group’s long-term strategy to shore up promoter holding to 40 per cent in all listed entities. In May 2004, group chairman Kumar Mangalam Birla had said he wanted to shore up the promoter holding to 30 per cent. This was accomplished by December 2010 through a series of restructurings, creeping acquisitions and preferential allotments. After this threshold was raised, in October 2011, Birla stated he wanted to increase promoter holding to 40 per cent. This has also largely been achieved, except in Grasim where the promoter stake is currently 31.3 per cent.
The proposed merger will increase the promoter holding to 39 per cent, not much far away from the 40 per cent target. Across the group, the promoter family’s control over listed companies has been higher than its direct shareholding – an arrangement typically seen in the Indian markets of the 1970s.
A look at how the shareholding has been increased reveals that between 2000 and 2007, the preferred mode was creeping acquisitions. From 2008 onwards, the stake increased, mostly through preferential allotments of shares and warrants. In 2015-16, and with the proposed transaction, the preferred mode to increase shareholding is through corporate restructurings. The scheme is likely to give the promoter group a higher holding of almost 74 per cent effective ownership of the financial services business once it lists.
Mumbai based Indo Count Industries (ICIL), known for spinning yarns, weaving fabrics and manufacturing textiles, is eyeing 15-20 per cent growth in business through exports. The company also offers cotton yarn and cotton knitted fabric on back of capacity expansion and strengthening business in the domestic market. ICIL, which nets 90 per cent of its revenue from exports, is also looking at expanding its export markets and strengthening its presence in other markets including Australia, Japan, South Africa and the Middle East.
The company, has three manufacturing units in Kolhapur and is spending around Rs 475 crores in two phases on capacity expansion. The investment will be funded by internal accruals and debt. Being a leading global player and a trusted supplier to the world’s top home linen brands, ICIL is known for its innovation, technology and for maintaining high quality standards across all its product ranges.
Having been in the business for over two decades, the company is looking at launching a range of premium bed linen for the Indian market. It is looking at changing the dynamics of current market and transforming the way consumers see and experience bed linen.
ICIL’s main goal is to bring premium quality products to Indian consumers through Indo Count Retail Ventures (ICRVL) and the launch of the domestic home textile brand Boutique Living. The company exports to approximately 50 countries in. It has showrooms and distribution centers in the United States, the United Kingdom and Australia. It also sells products online and through e-tailers.
Swedish company Hennes & Mauritz AB (H&M), has come in the eyes of the International Labour Organisation (ILO) for contracting with factories that allegedly violated child-labour laws in Myanmar. The other companies that have broken the law are Primark, Gap and Adidas which also source from Myanmar.
A book being published in Sweden next week describes how two factories in Myanmar had workers as young as 14 working more than 12 hours a day making clothes. H&M was one of their clients. In developing countries such as Myanmar, international conventions on child labour developed by the ILO allow children to start working at the age of 14 but that length of work hours violates both the conventions and Myanmar’s own laws.
What is bugging the ILO is that children work for long hours (especially overtime) or night shifts though it is not permissible. Interestingly, Myanmar happens to be one of the few countries that has not signed the convention laws including Bangladesh, India and the US. H&M said it has demanded an action plan, including improved recruitment routines for handling ID cards from the factories where these conditions have reportedly existed since 2013.
Nepal’s local apparel manufacturers have sought incentives from the government to boost exports. In a meeting with Finance Minister Krishna Bahadur Mahara, a delegation of Garment Association Nepal (GAN), an umbrella body of readymade garment producers and exporters said if the government extends some facilities as per their demand, they would expand their export base by three folds within three years.
Submitting a memorandum to the finance minister, the Association asked for the expansion of refinancing period for export-oriented industries, 10 per cent export incentive, end to strikes and bandhs as well as introduction of hire and fire provision in the labour act to boost exports. GAN has said that they will be able to compete with other garment exporters in the global market if the government provides these facilities.
In its 500 biggest and best midsize companies’ rankings, Fortune India has honoured Nandan Denim that is poised to be Asia’s largest denim fabric manufacturer. The company ranks at N0. 38 among Fortune India Next 500 (2016) companies for wealth creation over three years. Besides, over five years, it has been ranking 42nd with 45.21 per cent CAGR increase in market capitalization as of April 2016.
Every year, Fortune India comes out with the definitive ranking of India’s 500 biggest and best midsize companies. The list celebrates those organisations that fuel India’s economy. Nandan Denim is a part of leading conglomerate, Chiripal Group that was established in 1972 and is currently diversified across several businesses like textiles, petrochemicals, chemicals, packaging, infrastructure and education.
Headquartered in Ahmedabad, Gujarat, Nandan Denim has expanded its capacity from 6 MMPA to a 110 MMPA (estimated in FY 2017) over last 10 years, a 15 fold growth in denim capacity in last one decade.
Fashion World Tokyo, supposed to be Japan’s largest bi-annual fashion trade show, will be held from November 7th to 9th at Tokyo Big Sight. The three-day event will showcase latest trends in clothing, bags, shoes, fashion and jewellery from around the world. As many as 850 exhibitors and nearly 28,000 visitors are likely to attend the show this year. The show will comprise of seven exhibitions viz the Tokyo Fashion Wear Expo, Tokyo Shoes Expo, Tokyo Bag Expo, Tokyo Fashion Jewellery Expo, Tokyo Men’s Fashion Expo, Textile Tokyo and OEM/Sourcing Expo.
The 2016 edition of Fashion World Tokyo will also hold conferences and seminars to stimulate the fashion market in Japan which will be addressed by opinion leaders of the Japanese fashion industry besides providing a unique opportunity to source Japan’s high-quality fashion products and connect with Japanese design firms. The show has been able to attract a great number of industry professionals and has become the most sought-after business platform in the Japanese fashion industry.
Vietnam’s exports to the Eurasian Economic Union (EAEU) are expected to grow by 18 to 20 per cent a year. The union consists of Russia, Belarus, Kazakhstan, Armenia and Kyrgystan. A free trade agreement, which this union has with Vietnam will come into force soon. Vietnam will be the first FTA partner of the union.
The agreement covers a market of almost 183 million people and accounts for 3.2 per cent of global gross domestic product. Vietnam and the union will cut about 90 per cent of their lines of tariff. They will slash the rate for nearly 60 per cent of tariff lines to zero per cent immediately after the agreement becomes effective.
Vietnam will immediately lift import duties for EAEU products such as salmon, which is taxed by 10 per cent, and tilapia and tuna, now seeing tariff rates of 15 to 20 per cent.
The EAEU will apply a zero per cent tariff for Vietnamese products such as uncondensed milk and ice cream with no sugar and sweet substance, which has an import tax of 15 per cent; and fresh chestnut and turkey meat, which are subject to import duties of five per cent and 20 per cent.
Textile printing is a $7.5 billion market, and projected to grow more than 34 per cent worldwide. As per World Textile Information Network, digital textile printing is expected to grow at 25 per cent. The oncoming Gartex exhibition to be held from August 27 to 29 at Pragati Maidan in Delhi, is expected to throw up trends and new technologies. In fact, more and more such shows from Fespa to Media Expo to Gartex are showcasing the strength of digital print with textiles. The reason: size plus growth. As per Fespa's survey textile print growth in graphics, garment, decor and industrial markets is the big shift in the future.
However, after a decade of advances in digital printing technologies for textiles, just one per cent of India's printed textiles are produced digitally. Most digital printing on textiles is done today mainly on polyester fabrics using dye sublimation. A total of 384 million sq. mt of fabric are being printed digitally via dye sublimation. In the first quarter of 2016, this grew by 18.4 per cent compared to the same period of the previous year. This is set to rise to 892 million sq. mt. in 2021.
Textile print growth in graphics, garments, decor and industrial markets is the big shift in the future. Initially inkjet was used for prototyping and one-offs as the time and cost of setting up screens made inkjet a better value. With the advent of customization and more efficient production equipment, digital printing is becoming mainstream.
In India, dye sublimation digital prints have been growing since 2011. It is easy to print digitally with low cost sublimation on polyester, but cotton and blends are also growing fast with reactive printing. The market for reactive inks has grown into high volumes but with low margins.
According to experts, a mere 10 per cent of brands today are responding to trends in music, media and movies in 90 days or less. Apparel retailers need to react more quickly and effectively to what consumers want, said speakers at the Canadian Apparel and Textile Sourcing Show in Toronto scheduled from August 22 to August 24. Long lead times are a thing of the past and telling the consumer what she wants is not the way to win anymore, believes global industry expert Jeff Streader, who will deliver the keynote speech at what is being billed as Canada’s first apparel and textile show at the International Centre.
The longest lead time in the manufacturing cycle is procuring raw materials which can take six to 12 weeks. But there are ways to position raw materials to keep them ready to be dyed and cut when new trends begin surfacing at retail. More than 3,000 people would attend the show, according to organizer Jason Prescott, CEO of Top10Wholesale.com and Manufacturer.com.
Andhra Pradesh government is contemplating slashing power tariff for spinning mills and providing them some relief. The proposal is to offer power at Rs 2 per unit to the spinning mills.
Spinning mills in the state provide employment to four lakh people but several mills are on the verge of closure due to heavy losses. Since lakh of cotton farmers and workers depend on the survival of the textile industry, the power tariff may be lowered. However, the new tariff, if implemented, would cause a burden of Rs 400 crores on the exchequer.
Similarly, ferro alloy industries owe power distribution companies Rs 300 crores. These industries may be allowed to clear their debts in two years. The price of cotton has increased from Rs 35,000 to Rs 48,000 a candy and is racing towards Rs 50,000 mark. But the yarn rate is not increasing commensurate with the increased cotton price. With a deep parity in yarn production and marketing cost, the industry is losing heavily from Rs 25 to Rs 30 per kg.
Spinning mills say the main reason for this unusual increase in cotton prices is because multinational and local trading companies are allowed to participate in auctions.
