FW
The Pakistan’s textile industry is likely to be exempted from load shedding, the textile industry was vying for resumption of load shedding by the end of the holy month of Ramadan but no decision was made by PEPCO the authority despite availability of surplus power.
Surplus power was available but the secretary water and power had left for Karachi well before Eid, therefore the decision to resume power supply to the textile industry was deferred till his return, the sources added. It may be noted that the Ministry of Water and Power had withdrawn exemption from load shedding to the textile industry with the start of the holy month of Ramazan. The textile industry was exposed to 10 hours a day load shedding, starting half an hour before Iftar and resuming half an hour after Sehri.
The relevant quarters had well-informed the authority that surplus power would be available during the Eid holidays due to reduced power consumption both by the domestic and commercial consumers. But the authority kept delaying the decision, apprehending any untoward situation in case the domestic consumers face in any trouble due to power supply to the industrial sector.
The Bangladesh garment industry has generated exports worth $28.09 bn in 2015-16 with a 10.21 per cent growth from the previous year, according to a data of the Export Promotion Bureau. The growth has been attributed to political stability during the year, increased productivity, entrepreneurs’ resilience and improvement of workers’ safety standards in factories, according to exporters and analysts. Data released yesterday shows earnings also exceeded target $27.37 bn set for the year. Of the total figure, the knitwear constituted $13.35bn and woven products $14.74bn.
Siddiqur Rahman, President, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) points out, though profit margin declined, manufacturers didn’t stop taking work orders. Hence one has to give credit to them for seeing an even better export growth in the country’s garment sector. He added that the start of manufacturing of high-end products by some entrepreneurs and the increase of workers’ productivity also contributed to achieve healthy export earnings.
Bangladesh earned over $34bn from exports in the 2015-16 fiscal and registered around 10% growth compared to last year. The figure also exceeded the export target set for the year by $743m.
Seeing a comfortable cotton supply position for the cotton season of 2015-16, the Cotton Advisory Board (CAB) has estimated the closing stock at 43 lakh bales as against its previous estimate of 35 lakh bales for this season. Similarly, the area under cotton has also been revised to 119.10 lakh hectare as against its previous estimate of 118.81 lakh hectare for the 2016-17 season.
M Senthilkumar, Chairman, The Southern India Mills’ Association (SIMA), points out cotton position in the domestic and international market is very comfortable. Accordingly, he has advised mills to avoid going in for panic purchase as the traders are taking undue advantage and have increased the prices abnormally closer to R48,000 per candy as against R33,200 per candy that existed in April this year.
The SIMA chairman said that the current domestic cotton price was expensive by over R3,000 per candy and therefore he suggested that larger mills should opt for import so that the domestic prices soften.
The SIMA chairman pointed out that the traders have been speculating on the prices, saying that the acreage for the forthcoming season would drop. On the contrary, CAB has estimated a reasonable area and therefore, the cotton supply position would be comfortable in the forthcoming season also, he added. Abnormal increase in cotton price would have a serious impact on the entire textile value chain as the international cotton price is around 10 per cent lower and the Indian cotton textiles and clothing industry cannot compete in the international market and the exports would drop further.
He also appealed to the Centre to strongly consider its earlier proposal of Cotton Price Stabilisation Scheme for spinning sector consisting of 5 per cent interest subvention for cotton purchase during October to April (peak season), increase the credit limit from three months to nine months and reduce the margin money from 25 to 10 per cent adding that this would greatly benefit the farmers and the industry and curb speculations.
"More than 64 per cent of supply chain professionals in manufacturing and retail plan to ramp up spending on supply chain digitization in the next three years. More than 25 per cent said they would increase the spend significantly. Shoppers in the US are continuing to flee into the more organised arms of online retail, whereas for the first quarter of 2016, retailers were hemorrhaging."
More than 64 per cent of supply chain professionals in manufacturing and retail plan to ramp up spending on supply chain digitization in the next three years. More than 25 per cent said they would increase the spend significantly. Shoppers in the US are continuing to flee into the more organised arms of online retail, whereas for the first quarter of 2016, retailers were hemorrhaging. The major force behind what is now - and finally - becoming a sea change, is consumers who refuse to waste their time and energy on things that aren’t innovative or efficient. And retailers taking too long to catch on to that fact are feeling it in their bottom lines.
Companies’ need a more balanced process and that process needs to be digitized, according to Robert Sinclair, COO of Li & Fung’s sourcing business. He said in the past the sourcing world has been very transactional, very linear. It’s sequential and that worked for decades. But as the industry matures, the economic balance between mitigation of the product lifecycle management of a manufacturer - which is extremely stressed, financially fragile - retailers and brand owners are also experiencing the same phenomenon, not making the same margins they used to. At either end of the supply chain, the manufacturers and the brand owners and the retailers face similar problems, so a balanced process is really the solution.
Compared to brands and retailers, manufacturers have worked to improve some efficiency over the last 30 plus years, many brands and retailers haven’t done enough to address their internal efficiency. He explained, now the industry has reached a point where brands and retailers have little other choice than to ask themselves the pressing, fundamental question: Are we as efficient, are we as streamlined and lean as we could be?
According to Sinclair, the answer to that question is no. The solution is collaboration between manufacturers of textiles, bags, shoes, in conjunction with the brand owners and retailers. Align productivity through the supply chain. It’s not looking at one as a standalone; you have to look at the supply chain holistically. Duplication, triplication, cut that out. And a digital supply chain will address that. Checking the checker has been the bane of many companies for years and even now, but that level of inefficiency won’t fly for much longer in today’s market.
Enabling the supply chain
Digitization enables movement and it enables efficiency because it provides efficiency and transparency. Think of it like the interstate highway network across North America, Sinclair offered. Those roadways weren’t built and connected overnight, it took decades, but their interconnectedness enabled movement in the same way that electricity enabled light.
Fundamentally it connected things on a massive scale and ultimately, it drove costs down, and digitization will do the same for manufacturing and supply chain, Sinclair said. Digitization is not an end game, it’s just the beginning. Digitization of the supply chain and everything about your business is a fundamental requirement for survival. It’s only a vehicle, an enabler, to stay in the game.
The bigger question companies have, beyond just getting on board with a digitized supply chain is what to do with the business once the supply chain has successfully been converted for the modern era.
What’s after digitization?
It’s going to be up to companies and corporations to leverage the platforms, according to Sinclair. Digitization is the creation of a platform, and what you do with that platform becomes your competitive advantage.
That companies will get left behind for failure to digitize isn’t just an overblown concept - those that don’t will die, with bankruptcy being their burial. There’s going to be a lot of casualties,” Sinclair said. But there’s also going to be a lot of new entries and new platforms that use this new grid to build on. Your competitive advantage is how you mine it, how you monetise it.
Today, manufacturing is a very labor-intensive business, and also a very administratively intensive one, with ‘track and trace’ taking up the lion’s share of time.
According to Sinclair, if you were to digitize the manufacturing process so that RFID (radio frequency identification) picks up the movement of all of the things just described, that sends it to pre-formed reports in the cloud, and it’s being tracked and traced automatically. That’s easy to view real time by the factory, ourselves. It’s powerful but it’s going to create a huge amount of technical unemployment. Companies may not yet have a firm grasp on just how to digitize their supply chains or what will follow after that digitization; many are already making the steps to invest in doing so.
According to a study done by software firm and consultancy JDA Software Group found that more than 64 per cent of supply chain professionals in manufacturing and retail plan to ramp up spending on supply chain digitization in the next three years. More than 25 per cent said they would increase the spend significantly. Nearly 60 per cent of those surveyed cited supply chain visibility as the driving factor behind the in-place plans.
Lectra, the world leader in integrated technology solutions dedicated to industries using fabrics, leather, technical textiles and composite materials, recently co-hosted a Design & Technology seminar in Milan with the Department of Design and the POLI.design Consortium of Politecnico di Milano, one of Italy’s largest technical universities.
Politecnico’s Department of Design joined Lectra’s Education Program in 2014. The partnership between the two organisations is based on a commitment to training students on the latest innovations in design technology and techniques to give them an advantage on the labor market. Students benefit from hands-on experience using Lectra’s latest generation technology, as well as its expertise and knowledge of industry best practices.
The seminar was an opportunity for students and executives from the upholstered furniture, marine, and automotive markets to gain valuable insights into the ways recent technological innovations can bolster design creativity and development efficiency.
The global apparel market, that has been experiencing a slowdown in growth since 2009, is now showing signs of recovery and sales are expected to exceed $1.4 trillion this year, according to a study conducted by an e-commerce and marketing agency in China. The US market is projected to represent 1/5th of the total which translates into more than $300 billion while the sales of women's apparel are on track and is expected to command 40 per cent of total apparel sales worldwide, reports the Shanghai-based agency, Sinointeractive.
The agency also found out that the purchasing habits of young women, the most important contributors to overall sales, have been changing and that they are becoming more and more sensitive to the price. The research report said 54.6% of women in the 18 to 35 age bracket in America buy their clothes online and the price-performance ratio is the most important factor influencing their decision to purchase.
Indonesia’s Import Identification Number (API) chairman Ade Sudrajat has said that rising food prices have forced people of Indonesia put aside their clothing preferences. The absorption of the domestic market, up to May, decreased 10 per cent compared to that of the same month in 2015. This information is based on a data received from the Indonesian Textile Association (API). According to API chairman, the performance of domestic market this year was far worse than that of last year. It was a sorry plight to notice that the rise in food prices rise has affected the purchasing power of the people.
Fortunately, the export market did not go down. In the period from January to April, the value of exports of textiles and textile products reached USD 3.96 billion. That figure is relatively stagnant compared to the same period last year. Meanwhile, the total value of exports reached $12.28 billion. The performance of Indonesian textile exports stagnated because of the competition from Vietnam which recorded export value of $30 billion in the first quarter of this year.
United States is still the main export market of textile products Indonesia. Its export reached 36 per cent followed by the EU with 14 per cent. Textile exports to the EU fell 20 per cent compared to that of last year.
Protesting against the company’s worsening management and demanding retroactive profit shares that are eight years late, dozens of workers of KCG Textile, Egypt started an open-ended strike last Sunday. The KCG factory is situated in the industrial area of 10th of Ramadan City. The workers said they would continue the strike until they are called on the negotiation table to sit with the company’s executive leaders and not the current management. They accused the latter of not paying out profit shares to the workers.
While focusing their feud on the management, the workers demanded the formation of an independent syndicate to ensure their rights and act as an advocate in front of the company and the application of a social security system to protect the workers from forced suspension. KCG is one of the largest international Turkish companies working in the field of textiles and energy.
In 2012, KCG expressed its desire to build an industrial compound in Sinai with an investment of $400 million.
While the Union government's recent Rs 6,000 crores package is aimed at generating 10 million jobs in the textile sector and boost exports by around $30 billion over three years and to encourage fresh investment in the sector, a look at the disbursement of the technology upgradation fund scheme (TUFS) to the textile industry shows a dismal picture.
As against disbursements worth roughly around Rs 24,000 crores in 2008-09, the same has more than halved to Rs 10,000-11,000 crores in 2014-15. Add to that, out of the total Rs 17,822 crores allocation made under multiple TUF schemes including modified (M-TUF), restructured (R-TUF) and revised restructured (RR-TUF) schemes, around Rs 8,000 crores of disbursement is still awaited.
Industry bodies and players say, while the recent Rs 6,000 crores package in terms of duty drawback to boost exports is welcome, the textile ministry will have to expedite disbursements to boost investment in the industry. According to K Selvaraju, secretary general of Southern India Mills Association (SIMA), investments are witnessing a downward trend. Like from 2013 onwards, investments have come down drastically. Not only has the TUF disbursement slowed down, but the government also brought down the subsidy gradually. Moreover, the TUFS disbursement excluded the spinning industry that has been showing the highest potential of fresh investments. On the contrary, other textile value chains where investments were slow saw higher allocation.
In terms of apparel exports, India continues to face stiff competition from Bangladesh and Vietnam the apparel exports of which is growing at 14 and 11 per cent as against India's eight per cent. According to the textile industry, the government will have to up the ante on TUFS disbursement, especially towards spinning, weaving and fabric manufacturing units in order to boost overall apparel exports.
Meanwhile, Confederation of Indian Textile Industry (CITI) says, the reduction in disbursement is also a conscious call in order to phase out of the previous TUF schemes to make way for the Amended TUF Scheme (A-TUF) and clear the backlog.
A number of foreign buyers of Bangladeshi garments, besides officials of Japanese giant Uniqlo have cancelled their scheduled business meeting in Bangladesh and asked exporters to meet up in a third country to negotiate orders following the terrorist attack at Gulshan on July 1. Exporters say, till now buyers are yet to show any intention to shift or cut export orders from Bangladesh due to the terrorist attack that killed 17 foreigners including apparel buyers but they expressed their anguish over the situation and wanted to know what measures have been taken to ensure security of foreign buyers.
Abdus Salam Murshedy, President of the Exporters Association of Bangladesh said some buyers of Europe and the United States who often visit Bangladesh had requested them to arrange visa to visit their countries for business meetings. But, they were not unwilling to place orders in the factories there as they were feeling scared.
He said that a number of global sourcing agents were not willing to fly to Bangladesh and exporters would have to fly to third countries like Hong Kong, Singapore and Dubai which would increase cost of doing business. Visa related difficulties would also hamper business, Salam feared. As per reports Japanese clothing major Uniqlo too cancelled visit of its officials to Bangladesh soon after the attack.
