FW
India, the leading producer of cotton in the world, can use homegrown cotton in manufacturing and exporting value added products. But since it is a seasonal commodity, speculation leads to an artificial price rise. There has been a rise of 35 per cent in cotton prices in the last 80 days in India, whereas world cotton is available 23 per cent cheaper. The jump in cotton prices has resulted in higher input costs for the spinning sector in India. So the Cotton Corporation of India (CCI) will sell its existing stock purchased under minimum support price to medium and small spinning mills.
Cotton prices reached a high of Rs 35,000 per candy in May this year. The CCI buys cotton from farmers when rates go below the support prices. The opening balance is expected to be 43 lakh bales as on September 30, 2016. Steps are being taken to manage whitefly attack on cotton in the northern states. Cotton exports from India have nearly halted because of the rise in prices. This has forced key importers like Bangladesh, Pakistan and Vietnam to turn to other suppliers. The price rise could subsequently push up fabric and clothing prices and put pressure on the margins of garment makers.
A proposal by European Union officials to restrict nearly 300 substances classified as carcinogenic, mutagenic or toxic for reproduction (CMR) has been slammed by several NGOs. The European Commission had collaborated with the European Chemicals Agency (ECHA) and EU member states to compile a list that it would use to enforce a possible ban on CMR substances in a range of consumer goods.
The EU proposed adding the list—spanning classified dyes and carcinogenic amines, petroleum and coal stream substances, and others—as a specific appendix to Reach, a European regulation concerning chemicals and their safe use. The commission is set to fast-track the restriction in textiles and apparel in two phases.
The first phase of the ban is limited to items containing at least 80 per cent of textile fibers by weight and which may come into direct contact with the skin. These items include apparel, footwear and bedding. Additional CMRs and consumer goods, including accessories, upholstery and floor coverings, will be considered in the second phase.
But several NGOs have criticized the idea for two reasons: there are too many materials under consideration for the proposed restriction to be fast-tracked; the scope of substances is not wide enough.
Minister of state for textile, Ajay Tamta inaugurated India International Garment Fair (IIGF) at Pragati Maidan, New Delhi yesterday. The fair runs from July 18 to 20. The exhibition has been peppered with themed fashion shows. Around 416 exhibitors are showcasing their innovations and products. Indian manufacturers, traders and designers are presenting their products for fashion and fashion accessories to trade visitors. As the sector's primary trade fair of the season, IIGF will set benchmarks for the entire industry.
In his speech, Tamta said this fair provides the Indian exporters an opportunity to exhibit their products that meets the international quality and technology standards. Events like these give a boost to the ‘Make in India’ program as the platform encourages smaller players and debutants to work towards making it a reality. Exporters should focus towards employment generation which is the real need of the hour, he later added.
The Apparel Export Promotional Council (AEPC), under the aegis of Ministry of textiles, Government of India, has been conducting this event for the last 29 years with resounding success. The network has been growing and flourishing year-to-year and forms the basis for the sourcing plans of all major brands in the world of fashion and accessories. With strong support of the government through ‘Market Access Initiative’ grant and incentives offered to buyers under the ‘Reverse Buyer Seller Meet’ scheme, the fair has always attracted buyers from various countries. As Ashok G Rajani, Chairman, AEPC, points out riding on the wave of textile package, this edition of IIGF sees a huge number of exhibitors.
He said with finer details of the package expected soon, the industry would fall in line and all the creases that have developed due to the problems faced till now would be straightened. He added a progressive outlook in the approach of exporters is clearly visible as the January edition of the fair had 322 exhibitors while this time it had 416 exhibitors. The face of IIGF has been evolving and IIGF July 2016 is be an addition to its ever increasing growth rate. As a boutique to wholesaler show, things on offer were further strengthened with new materials, innovative designs, new techniques and services.
Former senior executive of Reebok and Nike, Marilyn Tam, a top leadership speaker and co-author of the just-released book ‘Soul Over Matter’, is on a mission to ensure today’s global business world is armed with the information it needs to continue to make good, socially responsible choices and avoid a repeat of past mistakes. Though her rise to the top of apparel sourcing industry was meteoric but she, will never forget her humble beginnings as a child labourer in Hong Kong making plastic flowers and embroidering needlepoint handbags.
Tam will share her experiences and trade secrets in her keynote address at the upcoming Apparel Textile Sourcing Canada (ATSC) show that makes its debut in Toronto from August 22-24 at the International Centre. Tam will be one of dozens of leading acclaimed international and Canadian industry and government experts who will provide visitors with valuable insights and up-to-date information needed to more easily and effectively navigate through the sourcing process, including merchandising, marketing, e-commerce, compliance and trade agreements over the three days of conference sessions.
ATSC is a first-of-its-kind event in Canada that would bring together hundreds of apparel and textile manufacturers from around the world including China, India, Bangladesh, Mexico, the U.S., Honduras, Peru, Japan, Taiwan and other countries.
Delivering an unprecedented platform for making global industry connections, the event will feature 200 international exhibits showcasing a wide variety of merchandise, from everyday apparel, professional clothing and leisure wear, to carpets, linens and towels, to fashion accessories, hats and socks.
Sweden is looking for a joint project with the Aditya Birla Group in smart textiles as part of their effort to increase bilateral trade. Swedish minister for enterprises and innovation and rural affairs Sven-Erik Bucht stated that if the talks fructify a joint venture between Swedish company Domsjo and the Birlas along with the two governments will be inked.
He further stated that the prime aim of this visit is to boost development of smart textiles using VSF, cellulosic fibre and pulp as an alternative to cotton and hence the Birla group is a natural fit with its easily blendable cellulosic fibre.
Sweden is investing heavily in developing textiles made from sustainable raw materials as it seeks to support a globally successful textile industry, he added. Birla is a pioneer and the world's largest manufacturer of viscose staple fibre (VSF) which is a man-made bio-degradable fibre with characteristics akin to cotton.
Calling for a collective approach to address the climate change challenges, the minister confirmed that Sweden would like to share their experience and ideas about developing an ecosystem based on a circular bio-economy that will build a better environment.
Fashion brands and retailers from Europe and North America including G-Star, H&M, Mango and s.Oliver are determined to continue their work in Bangladesh despite back-to-back terrorist attacks there recently. Rob Wayss, Executive Director for the Accord on Fire and Building Safety in Bangladesh (the Accord), says member brands and retailers would continue their business in Bangladesh.
The Accord, a platform of over 200 apparel brands, retailers and importers from over 20 countries in Europe, and North America, Asia and Australia was set up in 2013 to work for improvement of safety in Bangladeshi factories after the collapse of Rana Plaza complex that resulted in that loss of over 1,100 lives.
Accord has informed that it is not afraid of any attack. Interestingly, officials of Accord have a meeting with the Bangladesh home minister over their security issue on Tuesday (today). Another fashion brand and retailers group, the Alliance for Bangladesh Worker Safety (ABWS) also clarified its position and said garment factories under its membership will stay put in Bangladesh and continue their regular operations there. The ABWS represents 28 major brands operating in Bangladesh, including several Canadian companies like Canadian Tire, Hudson’s Bay Co., Giant Tiger and YM Inc. as well as Gap Inc., Wal-Mart Stores Inc., Nordstrom Inc. and Target Corp.
Accord and Alliance, set to run until 2018, were ahead of schedule in improving safety at the factories in the country. Interestingly, some foreign companies working in Bangladesh's garment industry have suspended travel of their officials in Bangladesh after the terrorist attacks in Bangladesh.
Nearly 4,630 workers employed in 70 woven cotton textile factories across South Africa are a happy as they have walked away with an above-inflation wage agreement. This move has been hailed as a victory for textile wage earners. As per Southern African Clothing and Textile Workers Union (SACTWU) general secretary, Andre Kriel, workers had received an 8.25 per cent increase backdated to July 1, 2016.
Kriel said the agreement with woven cotton textile sector employers represented by the South African Cotton and Textile Processing Employers Association covers improvements in the prescribed minimum wages, retirement fund contributions and bargaining council levies. The muted nature of these negotiations and the relative speed with which the agreement was reached are in contrast with the talks taking place in other sectors.
Although the Treasury had warned about the implications of above-inflation wages on inflation and interest rates, SACTWU has long campaigned for a living wage and argued that textile workers are the lowest-paid workmen in the manufacturing sector. The cotton textile sector as well as the overall clothing industry is generally concentrated in KwaZulu-Natal, the Eastern Cape and Western Cape. In the government’s Industrial Policy Action Plan, the sector is identified as a high priority because it is labour-intensive.
In 2013, textiles and clothing accounted for about 14 per cent of manufacturing employment and represented South Africa’s second-largest source of tax revenue.
For its 25th anniversary, Turkish denim brand Mavi has joined forces with Italian fashion designer Adriano Goldschmied to create a denim collection titled ‘Indigo Move’ that would focus on comfort and an active lifestyle. The collection will launch in September this year and will include 24 women’s styles and 12 men’s styles in all shades of indigo.
The collection is made up of two fabrics: Move Denim, a knit-based fabrication with the appearance of indigo natural brush denim shadings but the performance of activewear; and Bi-stretch, a multi-directional stretch fabric that offers shape retention and elongation. The core piece for the women’s collection is a classic mid-rise super skinny jean. Other pieces include leggings, super high-rise skinnies, gauchos and mermaid flares. On the other hand, the men’s collection is centered around a slim leg fit and also offers joggers, track jackets, blazers and hooded pull-ups.
Goldschmied said, he was inspired by the word Mavi that meant blue in Turkish and the passion for the blue has been a fundamental pillar of the brand from the first time he teamed up with Mavi around 25 years ago. It is since then that the amazing Mavi team, powered by this passion, has created one of the leading global brands in the denim industry today.
The Indigo Move collection will sell between $98-$148 a piece and will be available online and in Mavi Brooklyn retail locations and with other international retailers.
"Indian the textile sector is one of the four most labour-intensive sectors of the economy, along with construction, agriculture and tourism sectors. It has a huge potential for generating sustainable jobs as well as export earnings. Currently, it employs about 35 million people and contributes 12 per cent of exports. But just 15 years ago, the share of textiles and clothing in India’s manufacturing exports was more than 25 per cent."
Indian the textile sector is one of the four most labour-intensive sectors of the economy, along with construction, agriculture and tourism sectors. It has a huge potential for generating sustainable jobs as well as export earnings. Currently, it employs about 35 million people and contributes 12 per cent of exports. But just 15 years ago, the share of textiles and clothing in India’s manufacturing exports was more than 25 per cent.
India’s garment exports have now been overtaken in dollar terms even by its neighbour Bangladesh, and Vietnam may not be far behind. Of course, Bangladesh has benefitted from duty-free access to the European Union, and indeed some Indian entrepreneurs too have located themselves in that country for that reason. But Bangladesh’s transformation of its garment sector within a decade is nothing short of and example, offering lessons for India. Meanwhile, India has a unique opportunity to reverse the decline in its export share and seize a global leadership position. Some of this opportunity is arising due to changing labour dynamics in China, which has been the world’s textiles behemoth.
Textiles, a huge opportunity for India
Chief Economic Advisor (CEA) Arvind Subramanian has been championing the cause of this sector with compelling data. He points out most of the sustained East Asian growth of past decades was on the back of the textile and clothing boom. Most tellingly, a unit of investment in the clothing sector generates 12 times as many jobs as the automobile sector and 30 times that of steel. Clearly, there is a big bang for the investment buck in textiles. Not surprisingly, the CEA’s passionate advocacy is showing results.
The recent reforms announced by the cabinet under a ‘textile package’ address some key impediments, and the package is timely. First, the reforms removed some of the embedded tax burden from exports through a duty drawback scheme. Secondly, firms are provided incentive to hire more workers through a subsidy to meet the EPF costs. But clearly much more needs to be done to harness the great promise. A CII-BCG study for textiles, made-ups and apparel estimates that the sector can generate 50 million jobs in the next nine years. Of these, more than 70 per cent will be for women. The study also shows that the shift of textiles and garments away from China is an annual opportunity of about 280 billion US dollars for other developing countries.
Advantage India
India has some advantages in being present in all parts of the value chain, beginning from fiber, yarn, fabric and going all the way to clothing, branded apparel and fashion. This is not to mention the new emerging markets like technical textiles that have industrial applications.
But here are two additional considerations that need close attention. First, is the issue of fiber neutrality. In India, there is a curious frenemy relationship between cotton and man-made (synthetic) fibers. The global consumption pattern is 65:35 in favour of synthetics (like polyester, rayon, acrylic), whereas in India it is exactly the reverse. The net imports of the US and EU show a steady decline in cotton textiles vis-à-vis manmade fiber products over the past five years.
If India needs to tap into the export opportunity to these developed nations, our domestic mix has to mimic the global demand pattern. In India, cotton makes up 80 per cent of all fiber consumption whereas in China it is 50 per cent. This skew has been made worse due to the highly unequal excise tax treatment of cotton versus the rest. The textile ministry is aware of this asymmetry, and a fiber-neutral policy is on the anvil. Hopefully, the GST regime will also discontinue the sharp asymmetry that has persisted for the past ten years.
Second, is the impact of free trade agreements. Fortuitously, the CEA himself is heading a committee to evaluate the costs and benefits of the several FTA that have been signed by India in the past couple of decades. Prima facie it appears that India’s trade deficit has uniformly gotten worse following several FTAs. No doubt, there has been trade enlargement, but not necessarily to India’s benefit. The reasons could be many – some fair, some unfair.
There is also the looming shadow of the mega treaty called the Trans Pacific Partnership which goes much beyond trade, and makes it compulsory for the entire value chain to be located in member countries. India is not a member of TPP and can potentially be at a serious disadvantage. Fortunately, the TPP is losing political support, so it may be several years into the future. Finally, despite these various hurdles, let us not lose sight of the huge promise of this sector (it is after all one of the trinity of roti, kapada, makaan), in generating large-scale jobs, especially for women, and healthy foreign exchange earnings. With proper policies and reforms, the textile sector in India is definitely heading for a high noon of great fortune.
The Indonesian Embassy in Dakar recently organized a business meeting with Senegalese businessmen to promote various products and strategic industries of Indonesia as well as the Trade Expo Indonesia (TEI) to be held in Jakarta from October 12 to 16 this year. Speaking on the occasion, the Indonesian Ambassador in Dakar, Mansyur Pangeran said that the bilateral relations between the two countries were still considered very low at only about $89,37 million in 2015.
In his presentation about the current state of Indonesian economy, the ambassador also promoted a variety of superior products and strategic industries of his country. Trade ties between Senegal and Indonesia has been growing rapidly in exports related to products such as palm oil, cocoa, rubber, cinnamon and textiles. The business meeting was attended by businessmen of Senegal who have been doing business with Indonesia earlier. In addition, the business meeting was also attended by businessmen of the Thies Senegal region.
At the end of it all, what emerged was Senegal was interested to invest in Indonesia.
