FW
Gurgaon-based home-grown apparel manufacturer and exporter Pearl Global Industries Limited (PGIL) reported its second quarter and first half results for the financial year 2015/16. Second quarter revenues grew by 41.3 per cent driven by higher capacity utilization and robust demand. EBIDTA grew by 57.3 per cent in line with the growth in revenues. EBIDTA Margin improved by 34 bps YoY to 3.3 per cent.
Commenting on the results, Rajkumar Chawla, Chief Financial Officer of the company, stated, “The second quarter witnessed strong sales momentum driven by higher capacity utilization. Positive operating leverage led to expansion in operating margins. We expect to maintain this momentum even during second half of the financial year backed by good visibility on the order book front. Improving top-line performance will help up to improve our overall profitability over the next few quarters.
Q2 FY16 PAT increased 100.5 per cent majorly driven by improved operating performance and also due to lower finance costs. PAT Margin improved by 32 bps to 1.1 per cent. Pearl Global Industries with its well-diversified vertically-integrated manufacturing base spread across India, Indonesia and Bangladesh is the preferred vendor to leading global brands such as GAP, Banana Republic, Kohl's, Macy's, Ralph Lauren and Tom Tailor.
Dedicated in-house design team of 75 designers located in Hong Kong, India and Indonesia, provide superior market intelligence and focus on creating brand specific product designs to generate and accelerate business opportunities for the global brands and retailers.
www.pearlglobal.com
Ahmedabad-based denim fabric maker Nandan Denim has raised Rs 50 crores (over $7.5 million) through an issue of fully convertible warrants to UK-based foreign institutional investor Polus Global Fund, as per a stock market disclosure.
Nandan Denim has issued 2.5 million fully convertible warrants that will be converted into equity shares at Rs 200 per share within 18 months. In a disclosure to BSE in September, the company had said, “The conversion price of Rs 200 per share is at over 70 per cent premium to Friday, September 18, 2015, closing price of Rs 115.50 per share on BSE and 250 per cent premium to the book value of Rs 57 per share.”
Nandan Denim started operations in 1994 with textile trading and forayed into textile manufacturing in 2004. It is currently engaged in manufacturing of denims, cotton fabrics and khakis. As on September 30, 2015, the promoters of the company held 60.94 per cent equity stake, while the remaining is held by the public shareholders.
www.nandandenim.com
A further sharp downturn in emerging market economies and world trade has weakened global growth to around 2.9 per cent this year – well below the long-run average – and is a source of uncertainty for near-term prospects, says the OECD, the organisation of Economic Cooperation and Development.
In its latest twice-yearly, the OECD projects a gradual strengthening of global growth in 2016 and 2017 to an annual 3.3 per cent and 3.6 per cent respectively. But a clear pick-up in activity requires a smooth rebalancing of activity in China and more robust investment in advanced economies. Emerging market challenges, weak trade and concerns about potential output suggest higher downside risks and vulnerabilities compared with the OECD’s June Outlook.
Presenting the outlook in Paris on November 9, 2015, OECD Secretary-General Angel Gurría said, “The slowdown in global trade and the continuing weakness in investment are deeply concerning. Robust trade and investment and stronger global growth should go hand in hand. G-20 leaders meeting in Antalya need to renew their efforts to secure strong, sustainable and balanced growth.
” The outlook calls for greater ambition by OECD and G20 countries in supporting demand and pursuing structural reforms to boost potential growth and ensure that its economic benefits are shared by all. It calls for policies to support short-term demand, including on-going monetary and fiscal policy support in accordance with countries’ policy space. Collective action to increase public investment is essential and would increase growth without increasing debt-to-GDP ratios.
www.oecd.org
Better Cotton Initiative has announced the publication of ‘2014 Harvest Report’. The report details Better Cotton harvest data at global and field levels in 2014, and completes the second of two reporting phases for the year.
Important highlights of the report include - 1.2 million farmers participated in BCI’s programme - up 79 per cent from 2013, BCI farmers produced two million metric tonnes of Better Cotton lint - a 118 per cent increase on the previous year, Better Cotton made up 7.6 per cent of global cotton production, Better Cotton was grown in 20 countries worldwide, five more than in 2013.
As an example of country results, Better Cotton farmers in Pakistan used 15 per cent less pesticide, 19 per cent less synthetic fertiliser, 18 per cent less water and increased their profits by 46 per cent as compared to comparison farmers. The organisation said, this year’s results confirmed the underlying premise of its model: higher yields, reduced inputs of synthetic pesticides and fertilisers, resulting in much higher income for its farmers.
As the 2015 season continues, Better Cotton Initiative plans to make strong progress towards establishing Better Cotton as a more sustainable mainstream commodity.
www.bettercotton.org
US cotton scenario has undergone a change over the years. To remain competitive and relevant, stakeholders in the industry are looking at ways to reposition themselves. Of course, China is the biggest global player, however, market growth and export opportunities outside China exist and are growing.
Strong cotton supplying regions in the US
Cotton acreage in the Mid-south US has declined and become highly uncertain due to increased competition from corn and soybeans. The Mid-south, traditionally, has a strong source with good yields and fibre quality. Historically, around one-third of the US production was accounted for by this region. However, this is now about 25 per cent or less.
Meanwhile, the Southeast has the acreage to do more if yields were better and comprises about one-third of the US production. In recent years, fibre quality in the Southeast has improved substantially, and because of convenient access to mills and export terminals, it could be a reliable supplier of quality cotton. The Southwest continues to account for roughly 40 percent of US production and acreage too is stable.
For the US, India has emerged a strong competitor. Typically, world cotton exports are 35 to 45 million bales annually and the US is the world’s largest exporter which makes up around 35 per cent. However, its market share has dropped in recent years.
China, Turkey, Mexico, Vietnam, Indonesia and Thailand are the largest importer of US cotton and the US’ market share to China has dipped over the past six to eight years, though it was up in 2014 crop year. However, India and Brazil’s market share has increased, while that of the US has dipped. In fact, India’s cotton production has doubled since 2003. Around 20 to 25 million bales of cotton are used annually by India’s textile mill industry and India is able to supply its needs with own production.
In 2006, world demand for cotton peaked at 124.3 million bales and dropped 6 per cent from 2006 to 2011. However, it has improved slowly since 2011. Demand was 14 million bales below 2006 for the 2014 crop year and is expected to increase slightly (1.6 percent) for this year.
Demand for cotton dipping
China’s textile mill industry has declined and demand for cotton has dipped globally. This decline is not seen everywhere. In fact, China’s decline has been partially offset by increases in other countries. Demand peaked in 2006 and overall use of cotton dipped 10 per cent between 2006 to 2015. Demand in India has increased 41 per cent, Bangladesh has increased 77 per cent and Indonesia 35 per cent. Even Vietnam, has a 4.5 million bales a year mill industry. The cotton mill industry in former Soviet Union states Kazakhstan, Turkmenistan, and Uzbekistan has grown by 74 per cent. Though there are many concerns plaguing the US cotton industry, several of these can be addressed successfully. Cotton industry leadership is working to increase demand for US cotton and market share.
Demand for quality is high and the US has always been a reliable supplier of quality fibre and mills are willing to pay for it. However, demand for good quality US cotton has grown of late. Reason: China has 68 million bales of questionable quality cotton, and global mill business per se has undergone a change.
Textile mills in Pakistan are likely to reduce their cotton use this year. Spindles are being used at 25 per cent of their capacity. This is because the sector is being hurt by the high cost of doing business. Normally the textiles sector uses 400,000 bales of cotton a month but this is likely to see a substantial drop.
One the threats the industry faces increase in power tariff is a major one. This is affecting exports of yarn and fabrics. The capacity to convert cotton into exportable goods through basic textiles is reducing fast. Producing a surplus for exports has become difficult.
Pakistan faced a 30 per cent decline in fabric exports in September 2015. Textile mills fear if they reduce cotton consumption, cotton farmers and textile workers would suffer and foreign exchange earnings through merchandise exports would drop. The textile industry has been designed to consume 14 million bales of cotton and produce an exportable surplus but the industry finds itself unable to do this. Structural imbalances are affecting mill operations.
Mill owners have called for a regulatory duty on the import of manmade fiber yarns, which they say will give an impetus to the industry and make its operations viable.
Around 18 per cent of garment factories in Bangladesh have been found to be vulnerable to safety hazards. About 23 per cent of the factories have been asked to conduct detailed engineering analysis. An inspection program, which started in November 2013, assessed fire, electrical and structural integrity in some 1,475 garment units till October 31.
Some 26 Accord-inspected units out of 1,356 were closed, while eight were partially closed. Alliance inspected some 829 units, while eight were closed and 12 were partially closed. ILO will help build the capacity of Bangladesh authorities to put in place an effective system for all remediation and regulatory oversight once the support of partners ends.
The International Finance Corporation, an arm of the World Bank, will provide low interest loans to Bangladeshi factory owners for safety improvements so long as overseas customers of those factories guarantee the loans. The groups are working with Bangladeshi factory owners to promote safety and finance improvements, like fireproof doors or fire-sprinkler systems that are required for garment factories 75 feet or taller in Bangladesh.
While all that is needed at some sites is removing machinery and stored fabrics from overloaded floors, others will need sprinkler systems, automated alarm systems and the strengthening of support columns.
DyStar has launched two new dyes of the Levafix ECO range – Levafix ECO Navy and Levafix ECO Forest. The dyestuffs are based on new chemistry, free of p-chloroaniline or other regulatory controlled amines found in many commodity reactive dyes. They are compliant with all relevant Restricted Substance Lists and with Oeko–Tex Standard 100.
Levafix ECO Navy is a neutral navy offering best color constancy in different light sources. Due to its superior chemistry, higher wet and light fastness properties can be achieved compared to conventional reactive navy dyes.
Levafix ECO Forest is a bluish dark-green shade that is a good option for shading reactive blacks. Levafix ECO Forest has a high color yield, a strong build-up and shows better technical performance compared to dark greens that are based on conventional reactive blacks. It has good light and perspiration-light fastness properties; good chlorinated water fastness; and very good fastness to multiple oxidative washes.
These excellent oxidative wash and light fastness properties lead to a more sustainable textile end product due to better retention of the original shade. With this novelty, DyStar provides additional innovation to the textile industry to achieve the best quality with the minimal environmental impact.
www.dystar.com
Pakistan has had to cut down on its spindle capacity during the last three and a half months primarily because of the high cost of doing business. These spindles were predominantly producing exportable goods. Textile mills are unable to pay monthly electricity bills and thus closing down one after another. The closing down of one million spindles means more than one million unsold cotton bales besides one million job losses. The industry fears the whole supply chain would get disrupted amid a world-wide recession and a fall of commodity prices, hindering the ability of local industry to compete internationally.
Weaving units in the country say cotton yarn as raw material should not be exported and instead be used in Pakistan for domestic consumption and for adding value to export goods. The cotton production of Pakistan has decreased by 10.38 per cent in 2014-15 over 2013-14.
The industry feels if the government desires to continue imposing 10 per cent regulatory duty on import of cotton yarn, the vital value added textile export sector, which earns a huge amount of foreign exchange for the nation and generates huge employment, would be completely ruined.
The industry feels the fabric that’s coming into Pakistan from Dubai is actually of Indian origin since there is no fabric manufacturing unit in Dubai.
Pakistan has had to cut down on its spindle capacity during the last three and a half months primarily because of the high cost of doing business. These spindles were predominantly producing exportable goods. Textile mills are unable to pay monthly electricity bills and thus closing down one after another. The closing down of one million spindles means more than one million unsold cotton bales besides one million job losses. The industry fears the whole supply chain would get disrupted amid a world-wide recession and a fall of commodity prices, hindering the ability of local industry to compete internationally.
Weaving units in the country say cotton yarn as raw material should not be exported and instead be used in Pakistan for domestic consumption and for adding value to export goods. The cotton production of Pakistan has decreased by 10.38 per cent in 2014-15 over 2013-14.
The industry feels if the government desires to continue imposing 10 per cent regulatory duty on import of cotton yarn, the vital value added textile export sector, which earns a huge amount of foreign exchange for the nation and generates huge employment, would be completely ruined.
The industry feels the fabric that’s coming into Pakistan from Dubai is actually of Indian origin since there is no fabric manufacturing unit in Dubai.
