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Devaluation in Chinese Yuan has posed a challenge not only for China, but Vietnam as well. Going by a recent statement of Ministry of Planning and Investment, Vietnam’s export to China, especially farm produce, may become more competitive in the coming months. China already holds an edge over its counterparts in the area of export. Vietnamese exporters, still unaffected, are expecting tough times ahead. Textile and garment exporters are expecting things to change for the worse by next year when the agreement some companies have with Chinese partners comes to an end.
Vietnamese exporters may enjoy benefits from the Vietnam-EU Free Trade Agreement (FTA) as the import tariff on Vietnam’s textile and garment products will be cut from 9 per cent to zero per cent after seven years.
Deputy chair of the Vietnam textile and Apparel Association, Dang Phoung Dung feels, the weak Yuan is not a good indication for markets in Vietnam. It will give a boost to Chinese imports in the country and will affect local enterprises negatively.
Kolkata remains relatively less industrialised compared to other apparel and textile hubs of India, though it has the biggest domestic brands and work-wear export companies. Mallcom (India), JPM Exports and Rama Overseas are now set to break the conventional manufacturing mindset of Kolkata and consolidate their manufacturing operations, for being more efficient and growth-oriented.
Kolkata-based work-wear manufacturers work through a network of importers and distributors, supplying to a wide range of industries and retailers. They cater to the European market majorly. Mallcom India started as a glove manufacturer in 1983, and then ventured into work-wear in 1990. The company has grown to become a complete work-wear solution provider with annual revenues upwards of US $ 45 million (Rs 300 crore).
Ajay Mall, Managing Director, Mallcom (India) states their export of work-wear apparels from Kolkata would be around $30 million (Rs 200 crores). Pankaj Madhogaria, Director, JPM Exports says demand for work-wear is stagnant in the West as newer manufacturing industries are coming up, mostly in Asia. This has become the world’s manufacturing hub and these companies are becoming more sensitive about work-wear safety, he added.
Thus, JPM Exports started working with buyers based in Canada and Australia. The company, established in 2009 has grown at the rate of 100 per cent since its inception and plans to surpass the turnover mark of US $ 15 million (Rs. 100 crore) this fiscal year. Saurav Soni, CEO, Rama Overseas says they are working with buyers based in Europe, US, Australia and South America, as a business strategy. The company manufactures one million gloves and 100,000 pieces of work-wear each month, and even has a leather tannery in the Kolkata Leather Complex, for supporting its glove manufacturing operations.
Over 10 lakh power looms in the textile centers of Bhiwandi and Malegaon in Maharashtra have stopped production because of the closure of textile processing units in Rajasthan. The alarming economic situation at both textile centers of Maharashtra has left about one million people jobless.
The closure of the textile processing units in Rajasthan has led to low demand for grey cloth in the market. Prices of grey cloth have come down below the actual manufacturing cost in the last three months while the prices of yarn remain the same. In this situation weavers find it difficult to run their power looms.
The closure of power loom units in Bhiwandi and Malegaon is bound to impact the textile business in Surat and other parts of the country. Prices of cotton grey cloth started falling in February this year when the Rajasthan Pollution Board axed about 800 textile processing units and forced them to stop work accusing them of violating norms.
However, the situation worsened further when the markets opened after the Eid break in July. This forced weavers in Malegaon to bring production down to a minimum. The 10 lakh power looms in Bhiwandi and Malegaon are estimated to be over 50 per cent of the total in India.
Machinery manufacturer Loepfe says the process of clearing core yarns, is a challenge for the clothing manufacturers, as stretch fabrics become more popular in clothing industry. They are used in sports fashion and in day-to-day garments as well.
Loepfe, manufactures sensors and monitoring equipment for yarn spinning and fabric weaving processes and offers optical yarn clearers, such as the Zenit+ which offer reliability and assist companies in yarn clearing and eliminates yarn faults during winding. Garment made of elastic yarns offer better comfort, better fit, and retain their shapes. Core yarns consist of at least two different components. Core yarns are used for woven and knitted stretch fabrics.
A staple fibre, such as cotton, is spun around an elasthane filament, during production. Loepfe reports that today, duo-core yarns made of three components, are used for high quality denim. These pose a challenge for the spinning and winding process. The structure of core yarns is a challenge, the manufacturer states. The so-called strip-back, for one, is a fault. Because of a slippage between the inner elasthane filament and the staple fibre the core is not completely covered with the cotton fibres. During dyeing, these faults can become visible in the end product, as elasthane and cotton have different characteristics.
Zenit+, which is the yarn clearer from Loepfe, has the optional LabPack, and is designed to identify these faults reliably. Manufactures use an optical method to identify thin and thick faults during winding and even dark foreign fibres can be detected with this optical method. An additional triboelectric sensor detects synthetic foreign matter, for example, polypropylene originating from packaging material.
Textile mills that processed cotton and wove it into cloth were once a monopoly of the southern US states before World War II. However, in the past 50 years, free trade agreements, automation and competition from countries such as China have affected these mills. Eventually, their businesses have touched ground zero. However, now, some textile jobs are making a comeback, but in a different way. As The New York Times reports, some Chinese manufacturers are setting their businesses in the US, after realising that it is cheaper to manufacture their products in Southern America than in China.South offers lucrative business prospects
A Chinese yarn-maker, Keer Group, is investing $218 million in a factory in South Carolina, while JN Fibers, another Chinese manufacturer, is investing $45 million in the same region. Then, there’s Shri Vallabh Pittie, an Indian company that is investing $70 million in a yarn-spinning plant in Sylvania, Ga. Other industries too are witnessing a change, Fuyao, a Chinese auto glass maker is investing in a $230 million production facility in Ohio. Besides, several Chinese manufacturers are expanding their capacity at Cirrus Aviation in Minnesota and Nexteer Automotive in Michigan.
The difference between the cost of manufacturing something in the US and in China has narrowed considerably, as per an index created by Boston Consulting. A product that could be manufactured for $1 in the US in 2004 could be produced for 85.6 cents in China. Ten years down the line, $1 for the product in the US would cost 95.6 cents if manufactured in China, which was not much in savings.
The reasons for the shift are many, though the cost differences haven’t changed much. For instance, Americans are still earning more wages than the Chinese workers are. According to figures from the Boston Consulting Group, Chinese workers made $12.47 an hour in 2014, which was slightly more than half of what American workers made at $22.32 an hour.
There are other factors that have made up for the difference in cost of doing business in the US. The state and local governments, for example, offer plenty of tax breaks and subsidies to companies that set up business in their jurisdictions. Besides, decrease in the cost of electricity, due to US’ natural gas boom, has attracted energy-intensive manufacturing industries. Also, as China’s economy has developed, wages have gone up, and thus the costs of land, energy and other raw materials.
Boston Consulting Group’s data shows that even when adjusted for productivity, over the past 10 years, wages of Chinese workers have risen by 187 per cent. Industrial electricity costs have gone up 66 per cent, while natural gas costs have risen by 138 per cent. The US wages, in the same timeline, have increased by only 27 per cent, while natural gas costs have dipped by 25 per cent.
Experts say, it is a lot easier to manufacture in the US products where Chinese companies need access to qualified labour or proximity to American consumers, but don’t need lots of low-cost labour. Chinese investment in the US though, remains small, but as some data by the Rhodium Group reveals, it is bringing tangible economic benefits in the form of jobs.
As far as manufacturing jobs in the US are concerned, it will never be the same as the 80’s, as industries are much more automated today. However, more skilled manufacturing jobs would act as a boon to the country’s economy. These workers are better paid, as manufacturers today need more highly trained workers who know how to operate automated systems.
Yet, China still is powerful where manufacturing is concerned, for the move out of the country applies to new industries and not existing ones.
Jumping on the bandwagon against the use of Angora is now Danish apparel retailer Bestseller. Bestseller is the latest among brands, which have stopped using Angora in their products keeping animal welfare in mind. Recently, Italian brand Benetton had banned the use of angora wool in all its collections. The fibre is extracted from Angora rabbits, reared in farms in China mainly.
The issue at the heart of the movement is live-plucking or mulesing of rabbits, which amounts to hurting the animals for the manufacturing of products. Since this goes against animal welfare policy of many companies, to do away with this fibre has become their prime agenda as for now.
Katrine Milman, CSR Responsible, said it is still unclear, in the absence of any evidence, whether the farm houses involved in producing the Angora fibres are using these methods. However, this situation of uncertainty does not give us leeway to take the chance on animal welfare. The company’s decision is in line with its animal welfare policy that no real fur can be used in products it makes.
Earlier this year, Inditex, the firm at the helm of brands such as Zara and Massimo Dutti, had also banned the use of Angora wools permanently over the same issue.
Birla Cellulose, in its endeavour to bring together different players of the value chain under one platform for successful delivery of Liva promise launched the Liva Accreditation Partner Forum (LAPF). LAPF is a community of spinners, fabricators and processors who work closely with Birla Cellulose on innovation, quality and technology to deliver Liva fabrics to consumers. Taking the LAPF initiative ahead, the company recently organised Kolkata Fashion Expo 2015 on August 12 and 13, which was attended by leading manufacturers, wholesalers and buyers.
Radhika Texprint, Surat, a frontrunner in saris and dress materials, showcased modal in a variety of colours as an innovation of Liva for the premium and mass markets. Mitesh Korat, owner of Radhika Texprint explained, “We are happy to be a part of LAPF and have achieved tremendous success with our newly launched sari brand Hawwah in which we have had intricate designs with Liva fabric. We got such a great response at the Kolkata Fashion Expo that we are planning to open an outlet or appoint a franchisee for Kolkata in the next six months.”
Jayraj Gajiwala, Managing Director of Jayraj Marketing, Surat, a leading manufacturer of jacquard fabrics believes his partnership with Liva will go a long way. “The response to Liva has been fantastic and we really appreciate Birla Cellulose for giving us this opportunity to showcase our exquisite Liva fabrics along with other LAPF Members,” he said.
Gokultex Prints, Surat, a leader in natural fabrics, showcased its exquisite collection in pure modal, CuproModal in many weaves, designs and prints which were accentuated by Liva fabrics. Also Dayal Silk & Wonder crafts, Bhagalpur, Rahul Traders, Kolkata and Sukanta Paul, Fulia displayed their fine collection of Liva saris.
Sighting a huge potential for Indian traditional clothing, the company feels in order to increase awareness and brand visibility, they need to become aggressive in of marketing ethnic wear and the opportunity can be provided by Liva. Many domestic and international buyers are showing keen interest in LAPF as they want to avail the benefits for sourcing quality products.
A special geosynthetics seminar and associated committee meetings are to be held in Mumbai, from December 2 to 4, 2015 at the Bombay Textile Research Association (BTRA) headquarters. ASTM International Committee D35 on Geosynthetics recently announced the seminar. The world’s fastest growing population resides in India and the country also has one of the most ambitious and dynamic infrastructure programs. Besides, India is also home to a robust manufacturing history in textiles, and textile knowledge has led to growing specialisation in polymeric materials, including geosynthetics.
Multiple organisations such as Ficci, and the International Geosynthetics Society (IGS) feel that standardisation efforts are needed. India has a strong and quickly development manufacturing industry for geosynthetics. The seminar is an exceptional opportunity for current and future stakeholders in the Indian industry to connect, exchange domestic and international insight, and create a future for these standards in India
Following the ASTM seminar, the 6th International Conference on Geosynthetics (GeoAsia 6) will be hosted by IGS India in New Delhi in November 2016.
For ASTM’s symposium, the BTRA is an excellent host as this association has had a long history of research and interaction with polymeric materials engineering. In September last year, the BTRA formalised an agreement with the Geosynthetic Institute (GSI) to create GSI-India.
Vidarbha's agricultural situation has changed and its cotton crop is expected to give a record yield. Last year, faced with a drought and the year before, excessive rains, farmers had a hard time. Good harvest though, may not be met with good prices, feel experts. Cotton rates are expected to reign below the minimum support price (MSP) of 4,050 a quintal. Currently, lint is being quoted at 33,000 a bale, which translates into 3,700 a quintal for raw cotton.
Low demand especially from China, is the reason for slack prices, then there is sizeable leftover stocks of last year. The rates may be marginally more than the MSP if not below MSP. The higher yield may only provide a saving grace feel experts.An officer in the state's agriculture department, responsible for gathering field data, said that if there are moderate showers in September and October, the yield may be the highest in the last five years.
Amravati division of Vidarbha, is a major cotton growing area. The recent round of showers has washed away the dry spell in Akola and Buldhana, which were lagging behind. This can be considered one of the best years in cotton. Yields are expected to be higher by around five quintals an acre. The weather, though, has to remain conducive in the coming days and showers have to be moderate in September.
China’s cotton imports fell 62.3 per cent in July from a year ago. Imports by China, the world’s top cotton consumer, are already down by 33 per cent this year after the government issued fewer quotas in a bid to boost demand for the domestic fiber.
China holds an estimated 11 million tons of cotton in state reserves, around half of the world’s stocks, after it bought up more than 80 per cent of the domestic crop between 2011 and 2013 to support growers. It is currently auctioning some of the fiber to mills at daily sales but has only managed to sell 3.7 per cent of the volume offered to date.
Beijing's surprise devaluation of the yuan last week, which pushed the currency to its lowest against the dollar in almost three years, is not seen as having a major impact on imports. Even if it does make imported cotton a bit less attractive, it also makes imported yarn less attractive.
With restricted volumes of import quotas for cotton, China’s textile mills have turned to importing yarn instead. Yarn imports are up 20 per cent in the first six months of the year. Imports for the 2015-16 crop year beginning in October are expected to fall to 1.3 million tons, down from 1.8 million tons in the current year.
