FW
"The government has announced a package of measures for the textiles and the garment industries. The notification says, the package is labour friendly and would promote employment generation, economies of scale and boost exports. The government expects that in the next three years it will generate 10 million jobs in the two industries and lead to a cumulative increase of $30 billion in exports and investment of Rs 74,000 crore. "
The government has announced a package of measures for the textiles and the garment industries. The notification says, the package is labour friendly and would promote employment generation, economies of scale and boost exports. The government expects that in the next three years it will generate 10 million jobs in the two industries and lead to a cumulative increase of $30 billion in exports and investment of Rs 74,000 crore. Official statistics say, 70 per cent of the workers in the garment industry are women and, therefore, the anticipated boost to employment, in the government’s view, will help in social transformation through women’s empowerment.
Exports get a boost
The enhanced duty drawback scheme, which, for the first time, will refund the levies imposed by the state governments as well, is the most important component of this package. Yet another significant component of the package is the increase in subsidy under the Technology Utilisation Fund Scheme (TUFS), which was amended in December 2015. Interestingly, the basis of the increase in subsidy has been changed from input to outcome; in other words, the subsidies will be disbursed only after the expected additional jobs are created. The annual budgetary support required for this new addition to the duty drawback measures is estimated at Rs 6,000 crore, the bulk of which would be expended through the duty drawback scheme. This additional spending would appear minuscule, given that the government expects garment exports to increase annually by more than 60 per cent over their 2015-16 level of more than Rs 1,10,000 crore over the next three years. Besides, the package would augment jobs in an industry that was the third-largest employer among the major industry groups in 2013-14, reports the Annual Survey of Industries.
The justification for supporting the textiles and the garment industries is compelling, and this can be better understood from two perspectives. The first is that this sector was a major foreign-exchange earner for India until the turn of the millennium, accounting for well over a quarter of the country’s export earnings. Over the next decade, the relative importance of the sector declined rapidly, and by 2011, exports of textiles and garments were just 11 per cent of India’s total outgo.
The decline in India’s presence in the global markets is the second perspective. For over the past couple of decades, India has been struggling to retain its place as a major exporter. India was once a key player in the international marketplace, and against its prowess the major economies had progressively imposed, with the full sanction of the multilateral trading system, higher levels of quota restrictions to limit the entry of its products. Alongside the decision to establish the World Trade Organization (WTO), an agreement was also reached to remove the quotas, which were eventually eliminated at the beginning of 2005. There were huge expectations that the quota removal would provide the much-needed incentives for the textiles and the garment sectors to improve their positions.
Mixed results
The textiles sector has seen a definite improvement among the major exporters, but the garments sector’s position has worsened. In the year 2000, India was not even on the list of the 10 largest exporters, having a share of just over 3 per cent of the global trade in textiles, and by 2014, India’s share had increased to almost 6 per cent and it was the third-largest exporter.
On the other hand, India’s garments exports have been lagging behind the country’s major competitors by quite some distance. In 2000, India’s share was 3 per cent and it was the ninth-largest exporter. After nearly a decade and a half, its share was still below 4 per cent. But while India’s share barely moved, Bangladesh and Vietnam were able to enhance their respective positions as suppliers of garments. Bangladesh had doubled its share in the global market, from 2.6 per cent in 2000 to more than 5 per cent in 2014, while Vietnam increased its share from less than 1 per cent to 4 per cent. One other issue that must be considered while making an assessment of the relative position of India is the China factor. Both the textiles and garment markets were overwhelmingly dominated by China. China’s share in textiles exports was nearly 36 per cent in 2014, up from 10 per cent in the year 2000; while its share in garment exports was even higher at 39 per cent, up from 18 per cent.
Focus on revival
The government needs to reflect as to whether the recent package of incentives is adequate for making Indian players more competitive in the global markets, given the huge gulf between India and the other leading players, in both textiles and garments. For quite some time now, there has been evidence aplenty that India’s textiles and garments industries lack the sinews to compete in the global markets. Successive governments have been mindful of this problem and have taken measures.
The government will have to find ways of ensuring that the shop-floor efficiencies of the two industries are taken to distinctly higher levels through concerted efforts of technology infusion, as it is focusing on the revival of the textiles and the garments industries. The capabilities of domestic machinery manufacturers need to be harnessed, for these entities can provide the solutions that the small firms in the textiles and garments sectors need urgently.
The share of Bangladeshi apparel exports globally increased to 5.9 per cent last year from 5.1 per cent in 2014. Bangladesh is the second largest exporter after China, which grabbed a 39.3 per cent of the global market. Competitors Vietnam, India and Cambodia are making faster strides than Bangladesh. Infrastructure is still a major barrier in Bangladesh.
India registered a two per cent growth in readymade garment exports last year and moderately increased its global market share to 4.10 per cent from 3.70 per cent in 2014. The country emerged the fifth largest exporter of clothing followed by Turkey. Turkey faced a negative 8 per cent growth in readymade garment export last year and its share slipped to 3.4 per cent from 3.5 per cent in 2014. Indonesia, Cambodia and the United States are the next three countries in the ranking.
Vietnam’s clothing exports registered a 10 per cent growth last year while Bangladesh registered a moderate six per cent growth. Vietnam is the only country among the top ten global exporters of clothing that registered double digit growth last year. Its share in the global clothing market stood at 4.9 per cent in 2015 from four per cent in 2014.
Taking a cue from the US, the European Union (EU) has launched a new legal challenge at the World Trade Organization over duties and quotas China imposes on its raw materials exports. The EU says, China has been violating WTO rules with restrictions on exports of key materials such as graphite, cobalt, chromium and magnesia which help Chinese industry at the expense of European companies and consumers.
By filing a similar action last week before the WTO, the US government observed that when China joined the WTO in 2001, it agreed to eliminate such export duties but had failed to follow through on the commitment. The US has said that it had expanded its complaint to include all the same materials covered in the European action.
These raw materials are essential for a broad range of industries from aerospace and car manufacturing to electronics and chemicals. In Washington, the US trade representative’s office said China’s export duties ranged from five to 20 per cent, raising prices for overseas buyers while Chinese companies paid much less and had more secure supplies. In addition, the export duties put pressure on non-Chinese manufacturers to shift production, technologies and jobs to China.
South African private equity firm Jacobs Capital has acquired Gelvenor Textiles. This means that Gelvenor is now a 100 per cent South African company. Gelvenor manufactures industrial, technical apparel, outdoor lifestyle, protective and aeronautical fabrics. Even though the two operate under the same parent company, they will continue to operate separately in the market as independent entities.
The new ownership will not result in any material changes in agreements with Gelvenor’s suppliers. Most importantly, the company’s sustained growth means there is no need for staff changes. Instead, the emphasis will be on further innovation and research as part of a drive to position Gelvenor as a global leader in the production of specialist fabrics. In the longer term, this could see the company expand and create further job opportunities.
Plans are in place to grow production of aeronautical textiles by at least 30 per cent in the next year through the production of light and thin fabrics for rescue parachutes as well as capture additional market share in the paragliding market.
The sale is very positive for Gelvenor as Jacobs Capital supports its sustainable business model and its strategy of continuing to place Gelvenor at the forefront of specialty and technical textiles.
Even though Vietnam’s textile and garment exports showed growth in the first half of this year, local firms are facing difficulties in obtaining production and export contracts for the second half of 2016, says the country’s Ministry of Industry and Trade (MoIT). To support local firms, the ministry has proposed the development of large textile and garment industrial zones on 500 – 1000 hectare of land to attract local and foreign investment in dyeing, and fabric and yarn production. The ministry has also proposed the government provide full support for the building of textile and garment industrial zones located in provinces and cities experiencing socio economic difficulties, in order to create conditions for the success of small and medium startups enterprises, according to the ministry.
The proposal also targets the development of transport infrastructure connecting large industrial zones to ports and logistic centres to reduce transportation costs. The Vietnam Textile and Apparel Association (VITAS), that sent a document to the Government detailing the difficulties of textile and garment enterprises and proposed solutions, supports the plan of Industrial zones (IZ) plan mooted by MoIT.
To this, VITAS suggested that the Government should provide credit for enterprises to build waste water treatment centres at those industrial zones. According to a ministry report, export showed a six per cent increase in the first half of this year to $12.8 billion. The industry also saw growth in the export value to its major markets including the US, increasing by 5.9 per cent to $4.29 billion; Japan with an increase of 2.9 per cent to $1.04 billion and South Korea with exports 15.58 per cent higher at $764.9 million.
Raymond faced a consolidated net loss at Rs 16.61 crores for the first quarter ended June 30, 2016. Total consolidated income from operations during the quarter under review was up 4.81 per cent. The company had posted a consolidated net loss of Rs 14.47 crores during the April-June period of the previous financial year.
In the current quarter Raymond witnessed subdued consumer demand with early onset of end of season sales in addition to a volatile global economic environment. Notwithstanding these challenges it was able to register growth in topline and EBITDA at the consolidated level, which speaks well of the resilience of its brands and distribution network.
Raymond makes a variety of fabrics -- from wool to wool-blended worsted suiting to specialty ring denims as well as high value shirting. The group is vertically and horizontally integrated to provide customers total textile solutions. It has a diverse product range of nearly 20,000 varieties of worsted suiting to cater to customers across age groups, occasions and styles.
The Raymond product range includes pure wools, wool blended with exotic fibers like camel hair, cashmere, angora and innovative blends of wool with polyester, linen and silk, suiting and trouser fabric.
Cinte Techtextil will take place in China from October 12 to 14, 2016. More than 500 exhibitors from 23 countries from across the globe are expected to be present at the fair. The product variety on offer covers the entire industry including technology and machinery, woven and knitted fabrics, nonwovens, coated textiles, composites, surface and bonding techniques, fibers and yarns and more.
Svenskt Konstsilke from Sweden will feature its range in high performance yarns, with an objective of extending business in China and Southeast Asia. With a similar aim, Toscana Spazzole Industriali from Italy, manufacturers of needle punching machines and resellers, will exhibit its latest technological advancements.
DiloGroup will display product samples made from recycled carbon fiber material. The group will also present its needled nonwoven products which can be applied in geo textiles, filter media, automotive fabrics, roofing materials, synthetic leather, natural fiber felts and more.
Cinte Techtextil China is Asia’s leading biennial trade fair for technical textile and nonwoven products. The daughter show of Techtextil in Germany, Cinte Techtextil China covers twelve application areas which comprehensively span the full range of potential uses of modern textile technologies. The full coverage of product groups and applications enables the fair to become a tailor-made business solution for the entire industry.
To be held from September 16-18 this year at the Paris Nord Villepinte, Première Vision Paris will promote and coordinate the complementary offer of its six shows within one homogenous, coherent and efficient event. This would reflect a continuity with prior editions that saw synergies and transversality strengthened between the show's many activity sectors and know-hows.
The show's unique creative offer and affirmed high-end and selective positioning respond more than ever to the needs of global creative fashion professionals looking to stand out in a context of instability and heightened competition. In a continuingly complex world, where markets face multiple threats political, security, economic - the creative force of Premiere Vision Paris strengthens the solidity of a unique and attractive ensemble Building on its values and an unmatched selective offer - the industry's largest and most diversified - the global event for fashion professionals promises a dynamic edition rich in inspirations and innovative collections for autumn winter 2017-18.
With 1,898 exhibitors as against to 1,924 in September 2015, a drop of -1.3 per cent, the offer is growing in terms of exhibition area. These investments reflect certain optimism on the part of exhibiting companies which are focusing on the development of more fully developed collections to serve an expected increase in the number of clients. They also reflect the impact and influence of the Premiere Vision Paris show on the industry's business activity.
The India International Garment Fair (IIGF), held from July 18 to 20 at Pragati Maidan, New Delhi, hosted 416 exhibitors from across the country. The garment fair was organised to provide Indian exporters an opportunity to exhibit their array of products to buyers from across the globe. More than 1,500 international buyers and 1,000 along with buying agents kept the atmosphere pulsating at the Fair during the three days.
The 57th IIGF was witness to a significant milestone with regard the industry’s foray into new markets. The Apparel Export Promotion Council (AEPC), India’s largest export promotion council signed a memorandum of understanding (MoU) with the Tehran Garment Union (TGU). Incidentally, TGU is an influential manufacturers and retailers association with legislative power in terms of Garment Commercial affairs in Iran. As part of “Iranian Specialists Garment Committee and other advisory bodies, TGU provides policy consultation to the government.
Ashok G Rajani, Chairman of AEPC and Mohamad Javad Sedghamiz, Vice President of TGU signed the MoU on behalf of Indian and Iranian bodies respectively. The MoU would remain effective till July 18, 2017. Ajay Tamta, Minister of State (MoS) for Textile commented, the fair provided Indian exporters an opportunity to exhibit their products that meet the international quality and technology standards. He said that events like these give a boost to the ‘Make in India’ programme, as the platform encourages smaller player and new entrants to work towards making it a reality. The minister expressed hope exporters would focus on employment generation which is the real need of the hour.
While the AEPC, the largest Export Promotion Council, has over 8000 members for the promotion of apparel exports from India, TGU has nearly 20,000 members - all garment manufacturers, distributors and retailers in Tehran.
As per the Iranian guild system rules which have been approved by Parliament, Iranian business licenses are not issued by neither municipality nor government but by guild unions that are part of the private sector. In practice, no one has the possibility of producing or selling garment in Tehran without obtaining license and membership of TGU.
Coming back to New York City for its 7th edition, Home Textiles Sourcing Expo that went on from July 12 to 14, welcomed exhibitors and buyers to the show floor with grace and warmth. As a long-term joint venture partnership between Messe Frankfurt and CCPIT-Tex, and one of the largest events in North America to focus solely on textiles and finished soft goods for all home applications, the Expo has become a go-to event for manufacturers, retailers, jobbers, converters, contract specifiers and designers.
This month’s edition once again showcased products in six categories, including: upholstery, bed, bathroom, table, window and floor. The summer 2016 edition of the Expo saw over 126 exhibitors representing 8 countries including Turkey, Pakistan, Egypt, China, India, USA and Vietnam. Both the Turkey and Pakistan pavilions returned to the show with over 200 sq. mt. space showcasing premium home goods. High-quality cotton, premium bedding and luxury bath textiles were also on display among July 2016 exhibitor product offerings. The Expo ultimately welcomed a total 858 verified visitors from 45 countries across three days while the co-located textile and apparel sourcing trade shows, Texworld USA and Apparel sourcing USA showed strong visitor attendance.
The Lenzing Innovation seminar series once again proved to be a big draw for attendees as were the brand new Industry Boot Camps. Several home trend-focused seminars and boot camp sessions catered specifically to the home market and spoke directly to issues that Home Textiles Sourcing attendees are facing in the industry.
