FW
Ahmedabad-based Globe Textiles is an exporter of yarns, fabrics, home textiles and readymade garments. It has set up a 50,000 sq. ft. facility for manufacturing and exporting denim jeans. This new cut, make and stitch facility has the capacity to manufacture 50,000 garments a month, raising the group’s combined capacity to 1,50,000 pieces currently. The plan is to hike capacity to 4,00,000 pieces per month.
The facility has stitching machines from Juki. Right now 80 per cent of Globe’s denim production is exported and it wishes to tip the scales to 40 per cent in favor of the domestic market. Singapore, Malaysia and the US are potential export markets for Globe Textiles. Last year, Globe forayed into the home textile segment with bed sheets. It now exports on an average three to four container loads per month.
Despite the volatility in foreign exchange which troubled both exporters and importers, Globe Textiles performed satisfactorily last year. However, large volume order programs extending over five to six months are tapering off. Customers are now placing orders on a container-to-container basis. Globe Textiles’ forte lies in contract manufacturing. By offering its best services to clients, growth is assured.
www.globetextiles.net/
Shanghai Tex 2015 was held on June 15 to 18 the focus was on textile industry. The expo creates an important platform for purchases of textile machinery and related products, and for the exchange of information technology. In the last exhibition in 2013, the exhibiting area reached 1,03,500 sq. mt. witn 1,000 companies from 25 countries and regions displaying their products.
The expo showcased latest development in textile technology related to fashion and apparel, footwear, functional clothing, car interiors, medical, health care, agriculture, civil engineering and construction clothing. It assists companies to reduce costs, improve efficiency and competitiveness.
This year’s expo focused on the application of automatic technology to textile and other industries. Among the exhibits were bleaching, dyeing, printing, finishing and packaging machinery. Natural and chemical fiber spinning machines and twisting machinery; nonwoven machinery, rope twisting machinery; weaving machines, knitting machines, hosiery machines; sewing equipment, packaging machines and washing machines.
China’s textile and garment industry has entered a phase of transformation. Rising labor costs are becoming a tremendous challenge for the labour intensive industry. Applying new technology to improve productivity, improving product quality and exploring new markets will be the key factors affecting companies’ long term development.
www.shanghaitex.cn/en/
The joint show of ITMA Asia and CITME will be held in China, October 21 to 25, 2016. This is the fifth edition of the show and from 2016 it will be held in October instead of in June.
The combined show takes place every two years. It has become the most influential professional event for the Asian and global textile machinery industry, with exhibition space expanding from 1,20,000 sq. mt. in 2008 to more than 1,50,000 sq. mt., attracting near 1,600 exhibitors and over 1,00,000 visitors.
The upcoming event is expected to take up 1,80,000 sq. mt. with participation from some 1,600 exhibitors. It is a large showcase of cutting-edge solutions for textile makers that is supported by all major trade associations. There will be a huge showcase of cutting-edge solutions for textile makers. The exhibition is being showcased by product category for the convenience of visitors. There are stringent controls in force to protect intellectual property.
The Chinese textile industry, with its rapid growth and one-third share of global textile production capacity, is one of the largest consumers of textile machinery, especially European textile machinery. Shanghai sits at the hub of the country’s textile industry, with more than half of its textile mills and more than 60 per cent of its textile machinery manufacturers located near the city and its provinces.
www.itmaasia.com/
Pakistan's cotton ginners have asked the government to immediately withdraw the 0.6 per cent withholding tax (WHT) on all banking transactions for non-filers as it would discourage banking transactions, promote non-banking and cash transactions and would lead to harmful consequences for the economy.
An adjustable income tax at 0.6 per cent has been imposed on all banking transactions of over Rs 50,000 in a day for non-filers in a bid to compel them to become filers. However, there is apprehension this decision would lead to many complications in the economy as it would cause a drop in bank deposits, promote the culture of cash transactions, affect the profit margins of taxpaying businessmen and enhance turnover tax for filers.
Ginners say the WHT could become counter-productive as it would further give incentives to non-filers to conduct cash transactions and promote the informal economy in the country. The imposition of this tax would also give rise to inflation as non-filers would pass its burden to the common man who would pay high prices on purchases.
Another objection is that the levy would affect the objective of financial inclusion. Since the government was already charging 0.3 per cent withholding tax from banks on transactions of Rs 50,000, the imposition of 0.6 per cent tax on non-filers would push many businessmen towards the informal economy. Ginners say the government should have taken the business community on board before imposing the new tax.
Pakistan has missed its cotton sowing target by about 10 per cent. Due to unprecedented rains during the early cotton sowing season, and low cotton price, wheat harvest was prolonged, so there was a significant decline in cotton sowing. The recent heat wave led to shedding of cotton flowers while the standing water may kill cotton plants.
The government has set the cotton target for the 2015-16 season at 15.49 million bales. Punjab was projected to produce 10.5 million bales from six million acres. However it missed the sowing target and the area under cultivation registered a decline of about six per cent. Sindh was projected to produce 4.4 million bales from 1.6 million acres. However only 1.4 million acres were cultivated and therefore the target was missed by 10 per cent. Balochistan and Khyber Pakhtunkhwa also missed their sowing targets. The cotton sowing target for the current season has been set one per cent higher than last year.
Punjab province which produces about 70 per cent of the total cotton has been hit hard and sowing remained well below target. Due to lower cotton prices, growers were hard hit last year and could not even cover costs. This discouraged farmers who grew less cotton this year.
India's spun yarn export earnings continued to decline for the 13th consecutive month in May 2015 while volume shipment growth remained positive. In May 2015, spun yarn exports were up two per cent in terms of volume but down 11 per cent in terms of value. Unit value realisation on export of yarns made of 100 per cent man-made fibers declined sharply in May particularly that of polyester yarn. Total volume too declined during the month in comparison with the export in the same month a year ago.
Polyester yarn exports were down four per cent in value while viscose yarn export was down by 35 per cent during the month. Acrylic yarn export too declined 19 per cent in May. Viscose yarn was exported to 22 countries in May. Belgium remained the single largest importer of viscose yarn followed by Iran.
Exports of blended spun yarns did much better than exports of 100 per cent cotton and 100 per cent manmade fiber yarns. In May, 6.7 million kg of PC yarns and 2.5 million kg of PV yarns were exported. Unit price realization was down 19 cents for viscose and 42 cents for polyester from a year ago.
The surplus yield of cotton in states like Maharashtra, Madhya Pradesh, Andhra Pradesh and Gujarat has already led to a huge pile up in many godowns across the country. The price of freshly harvested cotton in Tamil Nadu hovered around Rs 3,500 to Rs 4,000 because of the arrival of poor quality fibers moistened by the rain.
India is one of the largest cotton producing countries in the world. In fact there is a fast accumulating buffer stock of cotton globally. Other cotton producing countries like China and the United States are seeing a growing buffer stock of cotton produced in their own countries. The global accumulation of cotton stock is 21.82 million tons during 2014-15.
Last year, India’s cotton export had fallen to 0.89 million tons compared to 2.02 million tons the country exported in 2013-14. This was because of sluggish markets and a fall in buyers. Last year the country produced 6.4 million tons from 12.4 million hectares.
Recently harvested cotton is currently being sold below the minimum support price fixed for the commodity by the cabinet committee on economic affairs. The committee had fixed prices of Rs 3,800 for medium staple cotton and Rs 4,100 for long staple cotton. In many parts of Maharashtra and Odisha, however, traders are buying medium staple cotton for Rs 3,500 and lesser and long staple cotton for Rs 3,800 to Rs 4,000.
Last year China’s textiles and apparel exports to the US rose by 1.6 per cent. However, Vietnam’s exports to the US grew by 14.1 per cent. The country was responsible for a large share of the overall growth in US textile and apparel imports in 2014. Vietnam’s growth as an important supplier in recent years reflects the country’s low labor costs and industry’s focus on specialisation, modernisation, and increasing value adds.
In 2013, many new textile and apparel plants began production in Vietnam, largely fueled by foreign investment stimulated by the negotiation of the Trans-Pacific Partnership agreement. In 2014, around 20 international firms invested in Vietnam’s apparel industry. US retailers and brands are continuing a long term trend of diversifying their import sources to countries such as Vietnam and India as production costs in China’s textile and apparel industry increase. But as of now China remains the largest supplier to the US.
India is the third largest supplier of textiles and apparel to the US. US total exports of textiles and apparel rose three per cent in 2014. Fabrics, fibers and yarns (except raw cotton and raw wool) and apparel together accounted for just over three-quarters of the value of US exports in 2014.
Falling demand from China for cotton and cotton yarn has hit Indian exports as there has been a 20 per cent decline in cotton prices in financial year ’15. China’s decision to liquidate cotton stocks has been an inflection point for the world cotton trade and has led to a glut in the cotton market with exporters facing waning demand.
As the Chinese off take has slowed down, the Indian government has asked exporters to focus on markets like Latin America, the CIS countries and Africa. However, the focus market scheme and additional incentives have been withdrawn and duties on yarn, fabrics and garments are making India less competitive against Vietnam and Pakistan.
India has a big opportunity to increase domestic manufacturing of value-added products and grow exports in textiles if the government gets proactive on some issues faced by the exporters. Import and central excise duties on manmade fibers are hurting the export competitiveness of Indian synthetic yarn. The duties can be reduced. The yarn industry has to get raw material at lower rates. The government also has to liberalise tariffs on textile exports by signing free trade agreements with markets like European Union and China to make Indian exports competitive in the international market.
The US is the second major destination of Bangladeshi garment products after the EU. Bangladesh’s earnings from export of readymade garments to the US were up 2.85 per cent in fiscal year 2014-15 compared to the previous year. But there has been continuous fall in growth in the last two years. In financial year 2013-14 readymade garment exports to the US rose by 2.9 per cent, sharply down from 10.31 per cent in 2012-13.
Low demand, increased competition, political unrest and rise of production cost due to implementation of factory compliance are responsible for the slow-down. Buyers could not come to Bangladesh to place orders and further business negotiations because of the political turmoil. It hampered the export growth to a major destination.
The new challenges of competition from countries like Vietnam and Cambodia have caused a slowdown in export growth. Orders are being shifted to new competitors like Vietnam which can avail of the duty-free facility to the US market after signing the much anticipated TPP deal.
Another reason is increased production cost due to the compliance process. Although production costs have risen, prices haven’t, making Bangladesh less competitive in the global market. Myanmar, the emerging exporter of readymade garments to the US, has posted a 123 per cent growth in the first four months of this year.
