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Pakistan’s garment exports have fallen 12.4 per cent in the 11 month period (July-May) from a year ago. Cutthroat competition with countries like Vietnam, Bangladesh and China, is giving a tough time to exporters. While the minimum wage is around $68 in Bangladesh, in Pakistan it is $125 and still rising. While Pakistan gives exporters a four per cent rebate on an incremental basis, countries like Bangladesh go all the way.

Pakistan has witnessed 12 per cent decline in cotton cultivation this year as compared to last year. Pakistan is importing extra long staple cotton from the United States and some other countries. India gives subsidies on export of all surplus commodities which is not available to farming community in Pakistan. Due to massive subsidies on export of surplus commodities cotton in India, is cheaper in India than Pakistan.

To boost exports, Pakistan is contemplating a zero rated sales tax policy for five of its export sectors i.e. value-added textiles, carpets, surgical, sports goods and leather. Out of 4,00,000 cotton bales available in the country, 64,000 are with the Trading Cooperation of Pakistan and the rest with growers and other agencies.

Interfilière Lyon will be held in France from July 9 to 11, 2016. This is a trade fair for lingerie and swimwear materials and accessories. Around 280 exhibitors, including 40 new exhibiting companies are expected at the show.

The trade show will bring together active wear leaders and organise forums and conferences with in-depth reports on advances in the industry. The exhibition will be divided into seven sectors which include: lace, embroidery, fabrics (knits, woven, print and textile finishing), accessories (hooks, elastic tapes, buttons, and more), textile designers and trends agencies, fibers, and sourcing.

The ‘Momenti di Passione’ section event will focus on preview of summer 2018 trends. This dedicated swimwear, sportswear and active wear space is designed to highlight new products and provide a forward-looking overview of these markets. There will be a presentation of the base layer concept. The base layer concept is a driver for the active wear lingerie market. Base layer apparel with its important thermal qualities first appeared in the ski sector and is now a key part of active wear wardrobes.

The future of the well-being and fitness market will be discussed. Which functions should material manufacturers prioritize? Which developments should fiber specialists research?

www.interfiliere.com/

Sales growth picked up at Swedish budget fashion firm Hennes & Mauritz in May after unusually cold spring weather in Europe had capped growth in previous months. Sales in local currencies rose nine per cent last month from a year earlier. The company is expected to have marked down prices of unsold transitional products partly within the quarter. This is likely to impact gross margins for the second quarter. The May reading indicates monthly like-for-like sales growth of one per cent.

Monthly fast-fashion sales trends are often volatile and influenced by the weather and H&M cited an unusually cold spring in some markets after sluggish sales growth in March and April. H&M’s net sales in March through May, its fiscal second quarter, rose to 46.9 billion crowns from 45.9 billion. There was a one per cent decline in overall clothing sales in Germany, H&M's largest market, in May. Lackluster sales at some clothing retailers also indicate slowing underlying demand in some markets.

H&M is the second-biggest clothing retailer after Inditex, which owns Zara. Inditex beat forecasts with a six per cent rise in quarterly profit, driven by strong sales as fast turnover allowed Zara and other brands to react quickly to unseasonable weather.

https://www.hm.com/in/

The long-anticipated sales of cotton from China’s State Reserve began on May 3rd and during the first month of sales, demand has been strong with over 97 per cent of the cotton being offered finding buyers. As of mid June, more than 3.2 million bales (697,000 MT) had been sold.

Initially, foreign cotton -- US and Australian, represented majority of cotton being offered, but the amount of foreign cotton has steadily been reduced and in the first week of June no foreign cotton was offered. Total sales of foreign cotton have reached 300,000 MT, the reported limit for sales this auction cycle.

Meanwhile, sales are made through a daily auction where a minimum price is set for each lot offered for sale. A floor price is set each week based on the average of the previous week’s internal market price and the A-Index.

The minimum price of each lot is the floor price adjusted based on quality. All of the cotton being sold has been regraded and weighed. China announced that sales from the State Reserve would continue until the end of August, and that up to 2 million MT (9.2 million bales) could be sold. If sales were to continue at the same pace as observed so far, the entire 2 million MT could be sold by the time auctions end in August. However, even these large sales would represent less than one fifth of the total amount believed to be held in the State Reserve (11 to 11.5 million MT).

Some 21 readymade garment factories in Bangladesh have implemented the internationally recognised occupational health and safety (OHS) standards for industrial workers and workplace safety. The benefits of ensuring health and safety of garment workers have been translated to increasing worker retention and productivity as well as the mitigation of massive cost burdens that workplace accidents and hazards entail. 

These days, Bangladesh’s industrial sector has addressed the specific issues of fire, building and electric safety. Until now, OHS measures implemented in the industry were sporadic and disorganised in their approaches. A holistic approach is now being adopted to address OHS through operationalising of a management standard. There are potential benefits to adopting OHS measures to factories and the industry at large. These include greater acceptability in the compliance-sensitive western markets, which took on added importance following the tragic incidents of Rana Plaza and Tazreen.

The garment sector in Bangladesh had no choice but to adhere to norms. The export contract stipulated such binding agreements. Failure to comply meant that orders were cancelled and shifted elsewhere. It was not only the quality of the product that mattered the working environment in which garments were produced was also given equal attention.

Euratex, on its 20th anniversary - hosted an international conference 'Best in Partnerships' devoted to inter-sectoral partnerships to boost European manufacturing. The European Apparel and Textile Confederation (Euratex), is the voice of the textile and clothing industry in Europe.

In her key note address, said Elzbieta Bienkowska, European Commissioner for Internal Market, Industry, Entrepreneurship and SMEs, said that textile and fashion industry is a strategic sector in the EU and is performing well. The European Commission is undertaking a number of actions to meet three main challenges of the sector: innovation, international competition and skills shortage.

She underlined that European institutions are expecting full engagement of industry, because knowledge about companies' needs should drive the development of new policies and programmes.

Meanwhile, Euratex's President Serge Piolat said with textile and fashion sector appreciating the European Commission's is more willing to build a dialogue with the industry. Euratex proposed concrete action plan to the European Commission to strengthen internationalisation of SMEs, assure fair conditions for the European companies through stricter market surveillance, provide better access for SMEs to EU research funds and boost innovation investments at regional level through RegioTex initiative.

UK’s possible exit from the European Union may put a negative impact on the Bangladeshi exports to the UK, which is the third largest export destination for Bangladesh products, fear economists and exporters. With Britain set to vote on June 23 in a referendum to decide whether they should leave or remain in the European Union, latest opinion polls are suggesting a possible exit of UK from the EU.

According to economists, if the UK exits (commonly known as Brexit) the EU, Bangladesh would have to go for bilateral negotiation to avail trade facilities. ‘If the Brexit brings positive things for the economy of the UK it would not hit Bangladeshi exports, but if the exit leads to any adverse impact on the economy of UK and EU then we will be a sufferer, opined Centre for Policy Dialogue executive director Mustafizur Rahman. Bangladesh’s exports to UK was worth $3.20 billion in the financial year 2015-16 with $2.90 billion coming from readymade garments sector alone. Faruque Hassan, Senior VP, Bangladesh Garment Manufacturers and Exporters Association, believes Bangladeshi export business would be hampered as the possible Brexit would damage the economy of the EU. He hoped if the UK leaves EU the duty benefits for Bangladesh would remain same.

Bangladesh enjoys duty-free benefits for all products and flexible rules of origins for readymade garments in the EU. Due to Brexit, Bangladesh would have to need bilateral agreements to avail the benefits in the UK.

"Bangladesh apparel sector is yet to come of age after growing for more than 30 years with extensive policy and financial support from the state. Industry leaders still clamour for support and incentives on different pleas. Even at this moment, they are protesting the proposed increase in source tax. "

 

Incentives are passé Bangladesh RMG sector needs to focus on growth

Bangladesh apparel sector is yet to come of age after growing for more than 30 years with extensive policy and financial support from the state. Industry leaders still clamour for support and incentives on different pleas. Even at this moment, they are protesting the proposed increase in source tax.

In the recent Budget, the FM increased source tax from 0.60 per cent to 1.50 per cent for export earnings from RMG for the next fiscal year (FY2016-17). At the same time he has reduced corporate tax rate from 35 to 20 per cent. But the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) are of the opinion that rise in source tax will put apparel sector in jeopardy. They are also not happy with the significant reduction of the rate of corporate tax.

Incentives are passé Bangladesh RMG sector

Meanwhile, RMG unit owners want both source and corporate tax rates have to be lowered. They demand that source tax should be 0.30 per cent and corporate tax, 10 per cent. They fear that the industry would lose competitiveness, exports will decline, workers will lose job and economy will suffer. These are old arguments repeated often.

RMg success story However, defying all odds the readymade garments industry continued to grow. Three factors contributed to this growth: entrepreneurial dynamism of the owners, hard labour of the workers and uninterrupted policy support of the government. The garment industry has become a strong global competitive player. As per WTO, the country is now the third largest clothing exporter in the world after China and European Union (EU). Share of Bangladeshi RMG in global exports was 5.1 per cent in 2014 while that of Vietnam, India and Turkey were 4.0 per cent, 3.7 per cent and 3.0 per cent respectively.

The apparel sector is the source of 80 per cent export earnings and provides direct and indirect employment to around 4.2 million people. Annual export earnings from the garment sector have increased from $4.8 billion in 2001 to $25 billion in 2015. Despite all these, the industry suffers from structural problems including reluctance of a section of owners to improve working conditions and ensure decent wages. This section of garment owners and exporters dominates the leadership of the industry and always put pressure for incentives and privileges. A general tendency is not to accept market forces although exporters have to follow market mechanism.

As per market rule, all factories are not equally efficient and all cannot make equal profits. Some factories need to face shutdown and it does not make business sense to give support to these factories when they are unable to compete.

Taxes, not to a bug bear The proposed tax increase are logical, feel experts. The source tax on export proceedings is the final settlement for the garment industry. So, garment exporters don't have to make any readjustment. By paying only 0.60 per cent tax, they are actually paying lower tax compared to many others. The National Board of Revenue (NBR) in 2014 announced reduction of source tax in RMG industry from 0.80 per cent to 0.30 per cent for 15 months. A huge tax reduction was made to compensate damages faced during the political turmoil in the second half of 2013. For this, the government had to forego revenue worth Tk 20 billion in 15 months.

Moreover, the garment sector, needs to contribute more as the size of country's budget is growing. Thus, 1.5 per cent tax at source shouldn't be seen as a barrier to grow further. Moreover, to ease tax pressure, the budget also proposed to cut corporate tax rate. This means garments owners will pay one-fifth of their profit as tax which is currently estimated at one-third. This is clearly a big advantage for the industry and skilful manufacturers will tap the advantage.

Garment manufacturers and exporters have to build and demonstrate their capacity to face challenges. As China is gradually shifting from low-end products due to higher in labour cost, Bangladesh is in a position to fill the vacuum. While Vietnam and Cambodia are gradually advancing by taking geographical proximity to China, it is not too late for Bangladesh. However, two crucial factors need attention. First, low wages are passé as apparel manufacturers have to be ready to pay incremental wages along with better working condition. Second, fiscal incentives and other support measures will be reduced in future. Still the industry is expected to contribute more to the national exchequer.

The American Textile History Museum is shut for good. The museum found operating on a shrinking budget impossible. In addition there were serious operational challenges and other circumstances. Programs and classes at the museum will end June 30. Its collection will be preserved elsewhere.

The museum will still collect donations from individuals, corporations, and foundations to support the hours necessary to transfer the collection to another organization for long-term stewardship.

The museum opened in 1960. It tells the story of America through the art, history and science of textiles. It holds the world’s largest and most important collection of tools, hand looms, early production machines, spinning wheels as well as more than five million pieces of textile prints, fabric samples, rolled textiles coverlets, and costumes.

It documents and displays the history of textiles from long ago to modern space craft, haute couture and industrial safety uniforms. Visitors learn about synthetic fabrics and how expensive fabric was until mills did the weaving. It has one of the first nylon stocking knitting machines.

The central hall of the main exhibit is a ramp which goes up three floors. At the top is the loom factory which has lots of moving parts. The museum also offers spinning classes.

The global online children’s apparel market is being driven by increased internet penetration, an increase in average online spend, and younger population. The average amount spent on online per transactions and the numbers of transactions that take place are on the rise. Increase in the number of internet users and the buy it now attitude contribute significantly to the growth of this market.

In addition, the ease and time-saving aspect of online shopping, along with the wide range of products, encourages consumers to shop online rather than in physical stores.

Currently, the US represents the biggest chunk of online children’s wear sales in 2015 and was 37.24 per cent of the global market last year. In Europe, the UK accounted for 17 per cent of sales, Germany 33 per cent, and France 20 per cent of online retail last year.

The Middle East and Africa make up a little over five per cent of the global market. However, Asia-Pacific is forecast to experience the largest growth in the market by 2020, pushed on by growing populations (of which half are infants and toddlers), growing disposable incomes, and the demand for online retail. This region, made up of both developing and developed countries, accounted for 28.98 per cent of online revenues in 2015.

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