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Southern India Mills' Association (SIMA) has appealed to the Centre to take immediate steps to create a level-playing field for the sector. The industry is looking to the government for duty relief. In the absence of a level playing field due to higher duty rates of Indian textile products in various international markets, higher costs of raw materials, funding and high transaction etc, the industry is not in a position to achieve its potential growth rate.
Therefore, it wants raw materials of both cotton and synthetic fibers available at prices comparable to international prices; free trade agreements expedited with all major textile importing countries particularly China and EU; and tariff rates slightly lower than or at par with other competing nations’.
The Association has pitched for an early rollout of GST and prefers textile products to be brought under the lowest rate of GST as the textile industry is a low profit margin industry. Measures like these are expected to enable the industry to achieve a growth rate of 25 to 35 per cent in the short run and 20 per cent in the long run.
Spinning mills in the south want the 14 per cent import duty on cotton to be withdrawn. They are mulling suspending production for a day to draw the attention of the government to the industry's plight and impress the need for right policy initiatives.
A new organisation, Child Labor Free, is working with influential advertising agency Saatchi & Saatchi to tackle the problem of child labor in the textile industry. There is already growing consciousness about manufacturing practices in the textile industry.
If Child Labor Free does attain a position of influence customers will soon see garments on retail shelves with a little red heart symbol on the label. The red heart will indicate that the garment was produced without the involvement of child labor. The intent is that customers will shun garments not bearing the label.
This means that for brands not sourcing T-shirts and other garments with the little red heart symbol on the label may have an adverse impact on sales. Brands applying to use the Child Labor Free mark will have to provide manufacturing, component and sourcing information, along with evidence that child labor is absent in their supply chains. Child Labor Free will then evaluate the report, which may include recommendations for site inspections if deemed necessary.
Eliminating child labor in the textile industry is of course a noble cause, but success will ultimately depend upon the response of the average consumer.
A large number of world’s leading outdoor brands are now incorporating merino wool innovations into their collections, with wool becoming more prominent in outerwear apparel. As casual wear catches on across the world, major brands are increasingly interested in merino wool’s versatility.
Traditionally, wool was seen mainly as a fiber used in men’s suits. Yet, while it is still the premier fiber for high end woven wear, there is a lot of discussion about other uses for wool and the rise of the fiber in outdoor apparel. The Woolmark Company is highlighting Australian merino wool as the ultimate natural fiber and premier ingredient in luxury apparels. This is a reflection of trends. The world is experiencing a rise in sports luxe apparels, with consumers buying sportswear-turn-street wear, resulting in traditional fashion brands incorporating an element of active wear into their collections.
Merino is one of the world’s most ancient breeds of sheep. It makes its home in freezing conditions. The merino’s fleece is breathable in summer, insulating in winter, yet exceptionally soft and lightweight. Merino wool is a completely renewable fiber. When disposed of, the wool decomposes in soil in a matter of years, slowly releasing valuable nitrogen-based nutrients back into the earth, acting like a fertiliser. In contrast, synthetic fibers can be extremely slow to degrade.
Tehran will host the 21st International Exhibition of Textile Machinery, Raw Materials, Home Textiles, Embroidery Machines and Textile Products. The fair to be held in the first week of September at Tehran International Permanent Fairground is supposed to be one of the biggest textile industry exhibitions in the Middle East. This edition will feature numerous Iranian and foreign companies from 10 countries.
About 162 Iranian companies and 178 from India, China, Taiwan, Pakistan, South Korea, Spain, Italy, Germany, UAE, and Turkey will participate in the event. There has been a 15 per cent increase in the number of foreign companies participating in the expo, compared to the earlier edition. All types of textile equipment and industries including textile machinery, embroidery and sewing machines, home textiles such as blanket, fabric curtains, sheets, towels, cushions, and different types of threads and fibres and types of clothes will be showcased.
Some other programs to be held around the expo are two specialised seminars and 15 scientific workshops. The exhibition is being held with an aim to showcase domestic companies, institutes and organisations' capabilities and achievements, and finding new markets for exports and promoting exports. Other objectives include, forging new commercial communications, getting acquainted with successful global models in the textile industry and attracting foreign investment that would help generate employment.
In the light of textile mills facing closures, owing to the lack of conducive policies to promote growth, the standing Committee on Textile of the Senate took up the issue with the government. The Chairman of the committee Mohsin Aziz says that APTMA has submitted a detailed report, suggesting the restoration of the sector by addressing the issues related to tax, tariff and investment.
As per Aziz the export-oriented sector is lagging behind in Pakistan while it has witnessed immense growth in recent years in neighbouring countries. The Pakistan textile industry has clocked 22 per cent growth during the last five years, whereas the growth rate in Vietnam, China and India has been 230 per cent, 97 per cent and 94 per cent respectively. Aziz pointed out the textile industry is burdened with Rs 38 billion gas infrastructure development cess, Rs 78 billion electricity surcharge and Rs 65 billion innovative taxes. It all adds up to Rs 157 billion per annum, which is 12 per cent of the sales of the industry.
Aziz said the committee has stressed upon the need for restructuring the electricity tariff policy and bringing in the zero rating regime for textile operators, which is in sync with WTO laws, in order to make the sector more competitive and growth-oriented. He also pointed out many bottlenecks on the investment side and said the high cost of doing business is ruining the textile industry.
As a regional free-trade agreement called P-4 between New Zealand, Chile and Singapore, the Trans Pacific Partnership (TPP) had a humble beginnings. Brunei too joined this alliance in 2006. Former US President George W Bush, in 2008 announced that the country too would join the TPP. Then, Australia, Peru and Vietnam joined in the negotiation and later, Canada, Mexico, Malaysia, and finally, Japan joined the list of 12 countries, which were supposed to control or link 40 per cent of the global economy.
The TPP countries would certainly enjoy privileges of lower or zero tariff for export on goods to the member countries. Thus, Bangladesh’s garments and textiles export sector too would be affected as the US and Canadian markets under TPP countries. This is of great concern for Bangladesh.
Bangladesh experts are sceptical about the full execution of this agreement. The ‘yarn forward’ clause is one of the reasons. This means, to qualify for preferential tariff, fabric has to be made from fabric woven in a member country or that fabric has to be made from yarn made in a member country.
Bangladesh needs to start the process to counter any possible effect of TPP on its exports. It is important to revive GSP status since this will be seen as the first obstacle to start any preferential trade talk. Also, soon after the alliance is reached, phase two will begin and new countries would join in. Thus, Bangladesh could look to be included in TPPs second phase.
Bangladesh Apparel and Safety Expo is being held from August 6 to 8, 2015. It got spot orders for export of two million pieces of jackets and shirts and machinery, sweater machine, fire equipments and accessories.
Through this exposition Chittagong showcased its products to global buyers and proved its potential. Representatives of global buyers participated. The spot orders came mostly from Russian buyers. The expo showcased locally developed apparel products and provided an ideal opportunity for global apparel retailers to meet clothing manufacturers of Bangladesh. The safety pavilion at the expo acquainted local apparel manufacturers with a wide range of safety equipment and service providers.
The expo had 73 stalls in total. Among these were 17 for readymade garments, one for fabric, two for garment accessories, one for garment fabric (local), 18 for machinery, 25 for fire equipment, and seven for service providers.
Chittagong was chosen as the host city of the event. This has special significance. Chittagong is the commercial hub of Bangladesh. About 95 per cent of the country’s apparel trade flows through this port. The first and the largest export processing zone of Bangladesh is located in this city.
Bangladesh has a vision of reaching $50 billion of readymade garment exports by 2021. The seminars focused on ways to reach this target.
www.bgmea.com.bd/ctgexpo/
Spanish company Inditex having a globally successful brand like Zara under its portfolio has crossed a valuation mark of over $100 billion last week, with shares witnessing a rise of 36 per cent in the last year. The achievement, only held by select 80 companies worldwide, has now made Inditex the most valuable company in Spain.
Inditex's founder Amancio Ortega is the second richest man in the world. His company's subsidiaries include Zara, Zara Home, Massimo Dutti and Bershka among others. Many studies have been written about how Zara managed to succeed with its fast fashion theory against its rivals like H&M. The company is known for bringing ensembles inspired directly from the runway to its stores within two weeks. Industry experts say that the Zara strategy has been working in favour of the brand for two reasons – one because loyal consumers keep visiting the store to check new collections and then they also feel compelled to buy because the styles can fly off the shelves pretty fast.
According to a Goldman Sachs report which unravels the secret behind Zara’s success, “Unlike fast-fashion retailers, which have buying teams sourcing current trending fashion from third-party vendors, traditional specialty retailers have design teams creating product they believe is going to be trending 12 months out.”
While the apparel retailers are being cautious about their expansion plans, at the beginning of the year Inditex announced its plan to open eight new locations in Manhattan by the end of 2015.
www.inditex.com
Peru and El Salvador are currently in negotiations for a free trade agreement that could benefit their textile industry in a big way. The apparel industry in both countries is one of the most powerful in the region and together they could result in an interesting alliance.
The deal would fuse existing Salvadoran trade agreements, its economy and excellent labor and financial conditions with a long-standing Peruvian textile tradition, high-quality Peruvian products and Peru's added value.
Reaching a free trade agreement or at least a bilateral trade deal could further boost the apparel industry of both countries. El Salvador’s textile and apparel industry has been working towards structural changes, building capacity and meeting international compliance and standards in labor and environmental regulations. A robust and vertically integrated synthetic textile manufacturing cluster has developed over the past several years.
Peru’s economy is growing, and the spread of malls and stores is generating opportunities for local brands. Peruvian manufacturers are churning out fashionable apparel, with higher quality and faster delivery schedules. Attention is being paid to value added and upscale garments.
Although the free trade agreement hasn’t been reached between the two governments yet, the five-year negotiation process would appear to be ending soon.
Vietnam’s textile exports to countries that are part of Trans-Pacific Partnership (TPP) were almost 70 per cent of the total export value and is predicted to grow substantially once the agreement is signed. This is just in the first half of 2015. However, since 60 to 90 per cent of materials for textiles made in Vietnam are imported from countries that are not members of the TPP, the issue of rules of origin is a hurdle.
Among the TPP markets, the US is Vietnam’s largest, according to the Vietnam Textile and Apparel Association (Vitas). This comprised of 42 per cent of total textile exports in July, estimated at $5.18 billion, which had increased by 11.01 per cent compared to July last year.
Vietnam’s textile exporters, however have not paid much heed to the strict requirements on the origin of materials by TPP. It is the third-largest exporter to the US, however, a vast share of its raw materials are imported, mostly from China. Vietnam needs to use more of its own inputs to increase added value, as it will not be able to import materials from China. If it wants to benefit from the preferential tariffs provided under the TPP, this is what Vietnam would have to do when it joins the TPP.
The ‘yarn forward’ rule, according to Dang Phuong Dung, Vice Chairman and General Secretary of Vitas, would pose a major hurdle for Vietnam. As per the rule, all material used in production needs to be produced in countries that participate in the TPP. This rule would be an obstacle, as there were weaknesses in material supplies such as fabric and dyeing, which are dependent upon imports.
