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Bangladesh will probably remain the top garment sourcing destination for global retailers at least for the next five years. During this period, garment exports will grow 7 to 9 per cent year-on-year while India and Vietnam will be its nearest competitors. Some African countries are also coming up strongly in the global garment business. But China remains the undisputed leader in garment exports, with eight times the dollar volume of exports than the number two Asian apparel sourcing country, Bangladesh. Vietnam and India are tied for the third place.
Though Chinese apparel production has fallen since 2010, the dominance of global apparel sourcing market, the mix change toward Chinese consumers, and the substantial size of its growing middle class will keep China the apparel production powerhouse for the foreseeable future. Many of China’s garment makers are looking to open facilities in Cambodia, Vietnam and Myanmar as well as in other countries.
As for Africa, many governments in the region are using the textile and apparel industries as tools for industrialisation and economic development. By 2035, the working population in the region is expected to be the same as China’s today. Right now the top 10 garment exporting nations in sub-Saharan Africa have only a 0.55 per cent share of global apparel exports.
The genetically modified Monsanto Bt cotton seeds is not patented in India. and Monsanto has earned huge royalties on the crop without a patent. This changed the economics of cotton farming in India, but the government has just woken up to this reality. This awakening has come 13 years after the US multinational Monsanto launched the seeds in the country.
The Bollgard version of the seeds was introduced by Monsanto in 2002. These have an inherent resistance against bollworm, a common pest for cotton crop. The Mon-531 or cry1Ac gene, which was used in the seed, was not patented by Monsanto in India. Monsanto launched the Bollgard II variety in 2006, which had a patent.
Indian scientists could freely use the same cry1Ac gene to develop indigenous varieties and supply them to farmers through government channels as Monsanto did not have a patent for the Bollgard version. Monsanto, however, held misinformation for the gene, which ended all these efforts.
Researchers at the University of Agriculture Sciences (UAS), Dharwad, Karnataka, developed an indigenous seed in 2008, which they found contained the cry1Ac gene. On Ministry of Environment and Forests’ directions, Dharwad Bt was not used commercially due to an assumption that Monsanto had a patent on this gene. Farm activist Vijay Jawandhia took up the matter with Prime Minister Narendra Modi and Union agriculture secretary Siraj Hussain, last month had written to the DG of Indian Council of Agriculture Research (ICAR), requesting the agency to examine the possibility of using cry1Ac gene in developing Bt cotton varieties after obtaining necessary permissions from the genetic engineering appraisal committee (GEAC).
Buyer oriented online sourcing platform
The HKTDC Small-Order Zone is a buyer-oriented online sourcing SAM 3027platform for direct sourcing of quality products in small quantities. This innovative concept creates new global business opportunities for Indian companies and their products on the international stage; provide them real time exposure to focused sellers and buyers relevant to their specific industry and expand their business to international markets.
“Usually trade shows do not cater to the interests of small order buyers and sellers. By small orders, we mean 5 to 1,000 pieces. The maximum transactional value is $10,000. The average order, we are doing now is $100 to $200. Normally it’s 10 to 20 pieces per transaction. The basic principle of small order is fast moving, low inventory. The emergence of e-tailers has helped in growing our platform,” informs Lee.
The Small-Order Zone and the e-commerce platform hktdc.com, enables suppliers to promote and sell quality products in small quantities. This helps suppliers to test markets and maintain a low inventory through small volume orders. Currently, there are over 100,000 products available in quantities ranging from 5 – 1,000 pieces.
“We work on trust,” explains Lee, adding, “We get third parties to verify our suppliers, our companies. We get them authenticated. We also work with a testing, inspection and verifications authority that checks the company’s background, their quality, environmental and safety aspects. HKTDC is a neutral, impartial marketplace. Buyers can rely on us. We are an ideal platform for Indian buyers looking to source online,” asserts Lee.
HKTDC platform benefits small players
The Small Order Zone connects global buyers with third-party authenticated suppliers in a secure sourcing and payment environment without time or geographical constraints. HKTDC has built in a number of safeties for businesses, such as dealing directly with verified suppliers; the ‘Buy Now’ service offers instant order and payment for selected products and protection and processing of payments by PayPal.
According to Lee, the platform suits buyers who don’t have a big inventory and who like to offer variety. “Suppliers like dealing with small buyers and so diversify their risk. They also want to expand their client base. If they sell in small orders, it will give them a better profit margin” he explains.
Since 2012, both buyers and suppliers have been using the Small-Order Zone and the results have been positive, with the online and offline zones together helping a total of over 6,000 suppliers featuring over 100,000 products and resulting in 1.4 million sales leads to date. This easy online transaction process helps suppliers expand their reach internationally, bypassing complicated foreign trade processes and creating actual deals across the globe.
These online transactions carried out with off-line promotions reach out to more buyers, including small-volume buyers who may not have attended trade fairs in Hong Kong. By providing a four-in-one platform comprising a trade portal, trade fairs, trade publications and mobile apps, the HKTDC helps SMEs capture business opportunities effectively and efficiently.
“We do thematic promotions of products. We want more Indians to make use of small order sourcing so we have promotions targeting Indian buyers. Seven per cent of our orders come from India. We want the Indian market to be comparable to the European market. And we have the confidence we can do that. We will also be in touch with some logistics providers in this region to help lower freight costs because when they buy from our platform, the delivery costs are high. We are trying to tackle this issue,” avers Lee.
Small-order.hktdc.com
Specialised denim trade show, Bluezone is set to start in Munich on September 1 and 2, 2015. The show has registered a record 80 exhibitors, for the first time. Prosperity Textile, Kuroki, Azgard Nine, Advance Denim and Intex are some of the newcomers that will participate in the show. This year, the show will also host denim-related fabrics such as, flats, corduroys, mill-washed fabrics and accessories, apart from presenting international top denim manufacturers and finishers.
Monsieur T, German-French expert denim consultant has devised the new concept of the show this time. The Zenith Hall, which hosts the show, is set to turn into exoteric indigo laboratory that combines high-tech, comfort and function with magic, sexiness and enchantment.
Besides, there are special initiatives, which are a part of this new edition of the show such as, Tintes Egara, a Spanish garment finishing company that will stage live performances of batik and dyeing processes in the outdoor area of the show. Moreover, Monsieur T will present the latest trends, innovations and directions. Likewise, there are several others who will present new techniques and innovations.
An additional exhibition area adjacent to the ‘Kesselhaus’, which is located between the MOC and the Zenith Hall may also used for the show. This space, which will be a new anex in a modern new building, will offer extra creative space for selected fabric and garment suppliers. According to the show’s organisation, this huge space of approximately 2,500 sq. m. may be added to the February 2016 edition of Munich Fabric Start.
Fiber project by Green Initiatives has got two new sponsors recently. Arup Shanghai is an engineering consultancy firm and has been associated with Green Initiatives for a long time. The firm is involved in sustainable environmental activities on a global scale with a specific focus on leading edge sustainable design. The Director at Arup Shanghai, Michael Kwok, said the firm is really happy to be a part of the initiative, promoting the donation of old clothes for recycling. He himself was interested in doing so however, he found no channel and was unable to go ahead.
The other sponsor, Schneider Electric, is a multinational energy company, having interest in the areas of energy management and automation. The firm has promised to implement the project at their office in Pudong. Working on a global scale, Schneider Electric helps businesses to bring energy efficiency in their workplaces. It has over 1,000 employees in this campus. Under the project, Green Initiatives has placed bins in the campuses.
With five sponsors in Shanghai, the initiative aims at mitigating the impact of hazards to the environment from textile and clothing waste. Launched in December 2014, the project is a community-focussed and volunteer-run initiative.
Linking prices of RMG goods with the wages of workers, Bangladesh Prime Minister Sheikh Hasina has said buyers from developed countries should raise the prices of RMG items if they are really concerned about the welfare of garment workers in the country. She said garment workers would get higher wages only if the products they manufacture get a good price in the market.
Praising her government’s efforts in improving the condition of workers, Hasina stated that they have taken a number of steps for the welfare of workers. The minimum wages of garment workers are already up from Tk 1,600 in 2009 to Tk 5,300 now. The UK government has been quite appreciative of them for achieving millennium development goals (MDGs). The safety measures taken after the Rana Plaza collapse have also been praised immensely. The people of Bangladesh are hard working and touching new milestones all they need is a chance to perform, she added.
The textile industry in Nigeria will have a planned bailout, which was recently announced by the Central Bank of Nigeria (CBN). This is to diversify the economy and create job opportunities for the swarming population. Godwin Emefiele, CBN Governor made the announcement to key players in the industry. Emefiele stated that the funds would be released in a single-digit interest rate. The tenure of the loans would also be lengthy for stakeholders in the cotton, textile and garments segment, he added. The Governor also expressed that now, imports from Asia were completely dominating a subsector, which once employed over a million Nigerians. The Central Bank is now working together with the industry for complete solutions for long-term sustainable development of the sector. This is being done under Emefiele’s leadership.
CBN’s move is in the right direction, especially, now when Nigeria’s dependence on oil revenue will no longer sustain the country’s economy. In good times, Nigeria’s textile industry was a money-spinner for manufacturers, source of income for the people and was also a reliable source for the country to earn foreign revenue. For a flourishing country in textiles, which saw a growth of 67 per cent in 1991 and hired about 25 per cent workers in the manufacturing sector, most companies have either shut shop or are under performing. This is because of the unfavourable business environment, inconsistency in implementing government policies and absence of major indices of production in the sector. Encouragement to cotton farmers must be extended, zero per cent interest rates to be repaid after 15 years or more, and other such measures, need to be taken by the CBN to safeguard the country’s textile industry.
Myanmar has set a minimum wage for the garment industry. Once a thriving industry, Myanmar’s garment sector was hit hard by sanctions imposed by the United States, stripped of trade benefits and abandoned by brands who feared the reputational risk associated with the former junta. In a bid to change this, Myanmar lawmakers passed a minimum wage law in 2013, but negotiations between employers, trade unions and the government were delayed by garment workers' strikes and threats from garment factory owners - many from China and South Korea - to close if the minimum wage was set too high.
Myanmar’s new minimum monthly pay gives it a competitive advantage over thriving garment makers such as Vietnam and Cambodia. The approved wage would apply to workers across all sectors, but exclude small and family-run businesses that employ fewer than 15 people. The wage will come into effect on September 1. The move is likely to boost investment in the country's garment industry. Myanmar exported $1.5 billion worth of clothes and materials in 2014, up from $1.2 billion the previous year and $947 million in 2012. The country’s economy is expected to expand about eight per cent in the current fiscal year.
Texworld, an international textile trade fair will be held in France from September 14 to 17. Texworld brings with every edition a vast spread of fabrics, cotton blends, woven and knit wear, silk fabrics, functional fabrics, laces and ribbons, organic fabrics, jute textiles and processes apparels. With assurance of the best quality trims, fabrics and accessories, the fair gives apparel industry professionals the best in sourcing opportunities as exhibitors come here from far and wide with their best. Around 14,000 visitors are expected. Among the visitors are garment and fabric manufacturers, textile retailers and wholesalers, chain stores, department stores, agents, designers.
Texworld reflects the dynamic prêt-à-porter from the world of fashion. With exhibitors from around the world, this fair has now become an indispensable business platform and order fair of the industry. It connects suppliers, buyers and designers. The event focuses on innovative and creative clothing, fabrics and materials and impresses with innovative structures, material mixes and various color palettes.
Some 600 exhibitors will be present. Products are showcased by way of well choreographed fashion shows. Among the products exhibited are: linen, hemp, wool, denim, cotton and cotton blends, fibers, functional fabrics, silk, embroidery, lace, trims and accessories.
www.texworld.messefrankfurt.com/
Pakistan may impose a 10 per cent regulatory duty on bulk export of raw and grey cotton. Another proposal is that sales tax rebates for businessmen should be given in the shape of subsidy on electricity and gas bills. There is a view that tax to GDP ratio at 9.5 per cent was too low and there was a need to bring non-filers into the tax net. Withholding a tax of 0.3 and 0.6 per cent on bank transactions would bring more non-filers in the tax net.
Reduction of taxes on imports is expected to discourage the smuggling of tea and other items. Businesses want a reduction in the sales tax rate in Pakistan. They say it’s too high and leads to tax evasion and other illegal means to avoid it. Since Pakistan’s problems were too many, but resources were few, it was necessary economic issues are resolved in consultation with the business community. Taxation policies, they say, are a major hurdle in promoting exports.
Businessmen in Karachi say they give 65 per cent of the country’s taxes and contribute 25 per cent in GDP but get nothing much in return. Businessmen want an enabling business environment, with a better law and order situation and a corruption-free environment.
