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The US Secretary of Defense Ash Carter has recently announced that Advanced Functional Fabrics of America (AFFOA) was selected to lead the Revolutionary Fibers & Textiles Manufacturing Innovation Institute (RFT-MII). The RFT-MII is a collaborative effort between government and the private sector to accelerate development of the next generation of highly functional textiles from both commercial and military perspective.
President Obama announced the formation of the RFT-MII on March 18, 2015 as a part of his National Network of Manufacturing Innovation (NNMI) initiative. The NNMI brings together industry, academia and federal partners to increase US manufacturing competitiveness, by promoting a robust and sustainable manufacturing research and development infrastructure.
Total funding is expected to be almost $320 million. The Department of Defense (DoD) has committed $75 million, a figure matched by almost $250 million in money and other in-kind contributions from the US textile industry and other sources.
The National Council of Textile Organizations (NCTO) has welcomed the announcement. And NCTO president Augustine Tantillo says they are pleased that the RFT-MII has gone from concept to reality. This investment in advanced manufacturing will add to the substantial ongoing efforts associated with innovation in fiber and textile science in the United States.
This long range investment will help the United States maintain its current position as the most innovative and technically advanced textile industry in the world, according to Tantillo. They expect it will ultimately spur jobs and investment in our sector while also making our military stronger. He also noted that domestic industry supplies more than 8,000 different textile products to our warfighters. There are 579,000 jobs in US fiber, textile and apparel production. The sector exports were $27.75 billion last year capital investment within industry reached $2 billion in 2014, an increase of 50 percent since 2009. NCTO represents domestic textile manufacturers and related industry.
Accord and Alliance have terminated and suspended their business with 83 garment units in Bangladesh on grounds of their failure to implement workplace safety measures and ensure a safe working environment.
Accord is a platform of more than 200 buyers, brands and trade unions from mostly the European Union. It terminated business with a total of 23 garment factories. Alliance is a grouping of 26 North American apparel companies, buyers and retailers. It suspended 60 factories from its compliant factory list.
Both Alliance and Accord are conducting fire, electrical and structural integrity assessment in their listed factories. Accord inspected some 1,600 factories while Alliance assessed some 800 units. Where corrective actions to eliminate safety hazards are identified, the factory is required to implement the corrective actions according to a schedule that is mandatory and time-bound.
If a supplier fails to implement the corrective action and cooperate in Accord or Alliance inspections, the supplier will receive notice that its business with Accord/Alliance signatory companies will be terminated. The garment factories with whom Accord and Alliance have severed business ties are now being scrutinised by the Bangladesh government. If they are indeed found unsafe, action will be taken.
The Made in America movement appears to be picking up momentum but the apparel industry is not reaping the rewards.US manufacturing in March has shown a slight improvement.
While generally improving global economic conditions have helped to counteract some of the strong dollar’s negative impact on exports, production volumes are low and backlogs of work have fallen again.
Sustained weakness across the US manufacturing sector means that overall growth through the first quarter has slowed to its lowest since late 2012. Subdued client spending patterns within the energy sector, ongoing pressure from the strong dollar and general uncertainty about the business outlook are cited as factors weighing on new order flows in March.
New orders and increased production means the US manufacturing sector registered overall growth in March for the first time since last August. While textile mills reported new orders rose last month, the same could not be said for the apparel, leather and allied products industry which recorded a drop, in addition to declining levels of production and employment.
The current period of decline has been extended to four out of the past five months. Signs of recovery are faint but there has been quiet and steady progress on the economic front.
The cotton market may be global, but international commodity merchants are showing a preference for cotton futures contracts that are local.
While trading of US cotton futures often tops 20,000 contracts per day, volumes in the world contract totalled just 38 contracts over the entire month of March. The world contract was a sellers’contract, as it gave them a wide choice of delivery points. It never made sense to a number of people in the industry, and the odds of any new contract becoming successful are not very high.
The new world contract reflects the global nature of production, permitting cotton grown in locales from West Africa to Brazil to be delivered to warehouses in Australia, Malaysia, Taiwan and the US. The contract would provide a new price discovery and risk management vehicle for the large volume of commercial cotton that moves from key origins to the multiple Asian consuming countries that dominate global exports and imports of cotton.
Cotton executives have been cautious ahead of the first delivery month in May. Among their concerns are that lower quality bales would be sold from countries where cotton bolls are still picked by hand.
Volumes in Intercontinental Exchange’s world cotton futures, backed by bales from nine countries, have evaporated since their debut five months ago. Four in five trading sessions saw no transactions in February and March.
Pakistan will do away with the value added tax (VAT) for textiles. Pakistani readymade garment exports are currently gaining momentum in the international market. Hence the move to abolish VAT is expected to support this development further. In addition there will be a reduction of the power tariff.
A reduction of VAT on textiles from 15 per cent to zero should give Pakistan a competitive edge over other readymade garment-producing countries; in comparison, VAT on textiles is 15 per cent in Bangladesh, 12.5 per cent in India, 10 per cent in Cambodia and 17 per cent in China.
The textile and garment industry is Pakistan’s largest manufacturing industry and, after agriculture, employs the second largest number of skilled and unskilled workers, about 15 million people or roughly 30 per cent of Pakistan's overall workforce. In Asia, the country is the eighth largest exporter of textiles and garments.
Textile Asia was held in Pakistan, March 9 to 11, 2016. It attracted participants from more than 45 countries, among them Austria, China, Czech Republic, France, Germany, India, Italy, Korea, Taiwan, Turkey, UK and USA. The fair’s focus was on textiles, garments, embroidery, digital printing machinery and chemical and allied services.
India’s merchandise exports have been contracting for the last 15 months. Merchandise exports, the top 20 categories account for four-fifth of the total exports. Even in top export categories like textiles, India is exporting low value commodities such as cotton yarn or apparel rather than technical textiles.
India's trade pacts have exacerbated inverted duty structures – high import duties on raw materials and intermediates, and lower duties on finished goods – that discourage the production and export of value-added items. Several trade pacts have been signed, more for geo-political reasons than commercial reasons. Bangladesh and other countries have free access to European markets but India’s exports are 10 to 12 per cent costlier than theirs.
Textile exporters feel India’s trade agreements are not helping them much in competing globally. They say lower internal transaction costs and port charges will make them competitive. Vietnam has become India’s competitor now. About 40 per cent of India’s total exports are handled by the medium and small scale sector.
The South Asian Free Trade Agreement (SAFTA) has not resulted in any significant export gains. India’s trade deficit has widened with Asean. Further, most of India's preferential trade agreements are shallow in terms of product coverage.
International cotton prices have advanced in the past month, influenced by upward movements in New York, and has returned to the lower end of the previously well-established trading range, which had prevailed for several months.
International business activity has remained much the same as in the past several months, with spinners generally unwilling to extend demand beyond hand-to-mouth requirements. Mills have remained concentrated mainly on cotton for nearby delivery. The steady pace of business during the past few months has resulted in a fairly well-sold position for many trade sellers, with the result that the volume of cotton available from certain origins during the remaining months of the season appears to be becoming tight. However, little demand for cotton further forward has been in evidence, with the exception of some Brazilian new crop into Far Eastern markets.
US export sales reports released during March have painted a rather mixed picture, with strong numbers in the first half of the month and a less robust pace in the succeeding weeks.
Turkey continues to feature quite heavily as a destination for US exports. An overall decrease of around ten per cent, meanwhile, is foreseen in China. India has instructed farmers to adhere to a sowing window as one measure that might help in the effort to prevent a repeat of last year’s insect damage.
The Bangladesh Garment Manufacturers and Exporters Association has propsed certain tax reforms in its budget proposal for the fiscal year 2016-17. Apparel manufacturers say they want 0.3 per cent tax at source in the next fiscal year’s budget to remain competitive in the global market and uphold export growth as the production cost has increased due to safety standards improvement work.
Currently, the largest export sector of Bangladesh is paying 0.6 per cent tax at source, which was 0.3 per cent earlier. The proposal will be placed to the National Board of Revenue (NBR) next week. The apex body of ready-made garment industry also sought a five-year extension for reduced tax benefit for the country’s apparel makers.
Prices of apparel products continued to slide in the global markets including the US and the European Union while production cost has risen by 12 per cent, according to BGMEA Vice-President Mahmud Has an Khan Babu. As a result, RMG sector is going through a huge pressure to remain competitive with the global competitors, he added.
This is the reason why the industry wants to reduce the tax cut at source to 0.30 per cent. According to the BGMEA, the price of Bangladeshi RMG products has been cut by 2.45 per cent in the US market and 0.87 per cent in the EU market during January-July period last year. Euro was devalued by 11.87 per cent against US dollar in the last one year.
Many in Bangladesh are of the opinion that to help the export-oriented RMG sector, the government should reduce tax benefit for the import of LED lights and other related products. Another expert said the government has provided a lot of incentives for the sector, but due to slowdown in global economy, the sector needs policy support.
If all policy supports are met in the next budget, Bangladesh RMG sector will be able to earn $50 billion by 2021,At present, the $25.5 billion RMG sector employs about 4.4 million people, of which 80 per cent are women, mostly from rural areas.
Sheep farmers in Australia follow a controversial practice called mulesing. Mulesing is the removal of strips of wool-bearing skin from around the buttocks of a sheep to prevent flystrike. The wool around the buttocks can retain feces and urine, which attracts flies. Mulesing involves cutting off the skin around the buttocks of merino lambs, often without anaesthetic.
Around three-quarters of merino lambs – prized for their soft fleece – are mulesed when a few weeks old, about 20 million animals. Traditionally, this is conducted without pain relief, though the industry is now introducing local anaesthesia amid fears of a worldwide movement against it.
Major retail chains have over the years condemned the practice as unacceptable and have pledged to seek wool from non-mulesed Australian sheep or from other countries. The Australian wool industry says alternatives to mulesing are not yet viable or are not cost-effective. There are some proposals like skintraction, liquid nitrogen applications and clips but these are yet to win acceptance.
Mulesing was developed in 1927 and since then it has been a routine surgical husbandry procedure for the majority of sheep in Australia. The pain of mulesing is similar to that of castration but it lasts longer, for up to 48 hours.
Chinese apparel manufacturers are getting together to put up a brand new event for the fashion industry. The 30-year-old industry is now entering a new phase and now is the time the industry needs international resources to beef up. LINKINGplus, the new event planned is being jointly organized by China National Garment Association, the Sub-Council of Textile Industry. CCPIT, and China Fashion Association. The maiden event will take place from November 22-23, 2016 in Xiamen, a coastal city in South China.
Chen Dapeng, Executive Vice President, China National Garment Association “we have been thinking of this idea since the last few years. By way of the event, we hope to get together resources in terms of designers, studios, some good manufacturer new products or services. We want such exclusive resource should be available to Chinese manufacturers. “At the networking event, we are looking at around 100-150 such resources and companies. A space of around 2000 sq meter has been targeted; Taiwan has already confirmed a pavilion."
Connecting fashion industry across the value chain
The event will have four parts, namely B2B Space, PromoShow, Forum and Business Tour. B2B Space is the major part of the event. The organizers will invite international companies and organizations from upstream and downstream of the apparel industrial chain. The other three supporting events are designed to foster further communication and cooperation in diversified ways.
The event promises more than writing orders and finding agencies and franchisers. There are more possibilities like brand cooperation, operation management, and design collaboration.
One of the most attractive parts of LINKINGplus is pre-set match-making meetings which will guarantee the best efficient outcome for each participant. Based on the detailed questionnaires and feedback, event organizers will offer a list of companies for each overseas participant to B2B Space to make it time-efficient.
International brands will touch base with the Chinese apparel companies including manufacturers, designers, creative talents, brands, new materials, and fashion education. This will also be a platform for more established foreign companies who are seeking opportunities in China. However, due to asymmetric Information, many of them have not found the right access.
As the leading national organizations of the apparel and fashion industry in China, CNGA, CCPIT TEX and CFA, are some of the leading national organizations trying to build this platform. Many companies have already showed great interest in participation. One hopes over a period of time, LINKINGplus becomes an important platform for international players wanting to enter the Chinese market. After the maiden event in November, LINKINGplus will be held once a year in the most dynamic apparel industry clusters in China with various activities to foster communication and cooperation between China's apparel companies and their counterparts worldwide. In this event, B2B Space is the major part of LlNKINGplus. The organizers will invite 100-150 overseas companies and organizations that could meet the demand of China's apparel industry in its development to from this event and meet with Chinese apparel companies, brands, investors or local officials representing Industry clusters on a pre-set schedule offered by the event.
B2B Space is the major event at LINKINGplus. This will have five sections: Creative ODM, Brands Cooperation,New Materials,Design and Consulting and Education. Here Chinese garment companies, brands can be met with on a pre-set schedule offered by the organizers based on your feedback to a detailed questionnaire. PromoShow (22 All Day Xiamen International Conference Center Hotel) PromoShow as an additional way to introduce one self besides taking part in the B2B Space. This allows the company to show their advantages to a larger audience in a shorter time. Forum is another supporting event of LINKINGplus Under the theme of ‘Fusion - new opportunities and modes of international cooperation for the apparel Industry’, the half-day forum will give its stage to industry experts and corporate leaders to exchange and share ideas and experience in form of presentations and dialogues on topics like education, creative design collaboration, evolution in production driven by consumption and application scenarios of new materials and new technologies. Two one--day Business Tour options will be offered to the overseas applicants on the next day.
