FW
According to the latest estimates by agencies like Cotton Advisory Board (CAB) indicate that cotton output in the country will be 25 lakh bales less than the previous year. The latest estimate received by Maharashtra Cotton Growers' Federation shows that the national production is expected to be at 350 lakh bales.
In Maharashtra, projections have been reduced to 60-65 lakh bales from over 75 lakh bales earlier from the national and state production at 375 lakh and 80 lakh bales respectively reported last year.
However, national research agency Central Institute of Cotton Research (CICR) anticipates the output to be at least equal to the last year. From the regional perspective, both Vidarbha and Marathwada areas, prime cotton growing regions faced a severe drought this year that impacted the cotton produce. And while the production is expected to be higher in Vidarbha compared to Marathwada, traders in Marathwada are offering around Rs 4,200 a quintal, as against Rs 4,150 in Vidarbha because of the quality.
The situation is slightly better than the last year in Yavatmal, known for suicides by cotton farmers. But as compared to the general average yield, even this year's harvest is too less. Farmers may reap 7 to 8 quintals a hectare, as compared to an average of 12 quintals.
Cotcorp.gov.in
Maharashtra plans to develop Vidarbha district as a textile hub. The 2016-17 Budget will have a special allocation to promote cotton based industries. The detailed plan includes integrating the three nodal departments of textile, finance and agriculture.
The textile sector will be promoted through a public-private-partnership. Vidarbha is a major cotton growing region of India and among the biggest. It contributes 30 per cent of the crop. As part of the farm-to-fashion drive, the state government will spend Rs 2,000 crores in the region. A value added chain will integrate farmers with the textile industry.
All cotton related small and medium scale industries would be promoted in the region including cotton spinning mills in Akola, Buldhana, Yavatmal, Washim. At Nandgaon, 500 hectares of land have been approved for the textile hub which has received proposal from eight players. Work has already started.
Maharashtra has been pushing hard to seek higher minimum support price from the Center for cotton. The Center meanwhile has fixed MSP at Rs 4,100 per quintal. The process of cotton procurement is on with outlets including Nagpur, Aurangabad. The target of 100 lakh quintals is higher than last season’s 27 lakh quintals.
Santex Rimar has bought SMIT Textile, world’s leading manufacturers of looms and weaving machines. Santex is a partner for its customers throughout their production processes, from loom to finished natural and technical textiles. The Santex Rimar group is a specialist and technology partner for plant and equipment for finishing of textiles and for manufacturing high grade technical textiles.
SMIT Textile is one of world’s leading manufacturers of weaving machines, established in 1938. It is renowned for high standard levels of innovation, productivity and versatility, ensuring competitiveness among a large variety of applications, from garments fabrics to home textiles, terry cloths and technical fabrics.
With this synergy between SMIT Textile and Santex Rimar, customers can rely on one integrated technology provider for all production processes, a global service network, high quality products, a partner with a profile financially sound and deep technological heritage and know-how.
With the support of Santex Rimar group, SMIT Textile will be able to restart producing and supplying customers worldwide. Santex Rimar is present in various countries with four factories and more than 10,000 customers throughout the world. Due to the presence of the group’s local operations in China and in India, SMIT Textile will immediately be closer to customers all over Asia, ready to fulfil their needs on site on time.
www.santex-group.com/
FDI boosts economy
Goel and Hong Phuc feel, investments will not only come from TPP participant countries, such as the US and Japan where booming garment and shoe industries are poised to benefit from the elimination of tariffs, but from any country whose manufacturers are seeking easier and more secure access to some of the world’s most exciting consumer markets.
However, keeping in mind the favourable prospects for textile and garment industry, macro-economic indicators, pose fair warning to export dependent economies such as Vietnam. This is because the TPP and other future free trade agreements (FTAs) bring opportunities to Vietnam for increasing production and export, they will also create challenges that need to be tackled to secure future economic prosperity.
The past decade saw Vietnamese GDP grow at 6 per cent plus CAGR. The conducive economic environment has helped Vietnam grow its economy from $57 billion in 2006 to $187 billion in 2014. Investors are bullish about this growth and have pumped in $4 billion into the economy annually between 2001 and 2015. The textile industry is a primary growth engine in a manufacturing-driven economy contributing 15 per cent to the overall GDP, 18 per cent to overall exports, and 4 per cent to the global textile industry.
Textile industry’s growth drivers
The duo feel Vietnam’s textile industry, being an important driver of the economy, necessitates a focus in strategy formulation to maintain robust and sustainable performance in the evolving economic scenario. The primary driver for growth of Vietnamese textile industry came about with the completion of Multi Fibre Agreement (MFA) in 2005, which resulted in the abolition of quotas for first-world exports. The abundance of orders from the developed world resulted in a spurt in manufacturing with a mushrooming of small to medium players across these countries with turnover between $50 million to $200 million per annum. With Vietnam’s share of the global textile trade at 4 per cent, and being one of the top exporters of textiles and garments to the US, there is still a lot of scope in the short- to medium-term for accommodating more companies, or for the existing ones to add significantly to their current volume and revenue.
The duo feel FTAs being signed with the Eurasian Customs Union, and South Korea, as well as the TPP (which is estimated to increase exports to the US from $9.8 billion in 2014 to $30 billion in 2020) will certainly provide this impulse. However, while the macro situation seemingly assures sustained topline growth potential, the challenge of comparative cost inefficiencies will be even more significant with general price reductions by competing countries. Statistics show that while trade has expanded, the prices from exporting nations have actually reduced. The global price reduction trends put immediate pressure on the suppliers.
Investment in technology to stay competitive
It is imperative for the Vietnamese textile industry to look deeply into its operating models and tackle possible cost disadvantages to remain competitive globally. Studies have shown that once the TPP comes into effect the new trade relationships would create an additional six million jobs in Vietnam’s textile and garment industry. However, it will also increase the labour wage by 12 to 15 per cent. As a consequence, Vietnam needs to invest in techniques of modern floor management and industrial engineering practices to further enforce the advantage. Industrial engineering, lean manufacturing practices – especially in the cut and make departments – can help the organisations increase labour productivity substantially.
Supply lead time, according to the duo, is the other major differentiator: Players having control on upstream activities would be the first choice for customers sourcing in Vietnam. Gaining control can be done either by backward integration or putting appropriate demand management, planning, and procurement processes in place. For Vietnam, a key aspect of the infrastructure, apart from the plant and machinery, is the logistics infrastructure. The current state of Vietnam’s logistics infrastructure is sub-optimal, leading to higher procurement and delivery lead times with the sourcing to free on board shipping point) time often as high as 80 days. Players in other countries are operating with lead times of between 40-50 days. The situation can be remedied through the development of local sourcing options, which can cut the sourcing time of 20 days considerably.
www.kpmg.com
Lenzing has devised a business strategy for coming years. Its main priorities are strengthening the company’s core business, intensifying cooperation with customers along the value chain, increasing the share of specialty fibers to 50 per cent of total revenue by 2020, expanding its quality and technological leadership for man-made cellulose fibers and opening up new attractive business areas.
The objective is to safeguard and expand Lenzing’s leadership role in the dynamic growth market for man-made cellulose fibers. The new strategy reflects the objective of generating sustainable growth with specialty fibers such as Lenzing Modal or Tencel. The target is to increase Lenzing’s pulp position through backward integration by increasing the group’s own pulp production volumes and expanding strategic co-operations.
Lenzing aims at generating 50 per cent of total revenue from the business with eco-friendly specialty fibers such as Tencel, Lenzing Modal and viscose fiber specialties by the year 2020. Lenzing will further increase production capacities for Tencel depending on market requirements.
The reorganisation of the technical service units will be concluded in 2016. Compared to the previous year, Lenzing wants to continually increase EBITDA by 10 per cent annually and aims to increase the return on capital employed to more than 10 per cent by 2020. At the same time, the objective is to keep net financial debt at a level which is less than 2.5 times EBITDA.
www.lenzing.com/
The Sri Lanka Export Development Board (EDB) recently facilitated a meeting between a team of multinational buyers and Sri Lankan apparel giants on November 27, 2015 at Mt Lavinia Hotel. The meeting succeeded in bridging the gap between Sri Lankan players and nine top global retailers.
Apparel segment contributes the highest export share to Sri Lanka's economy and in 2014 it earned $ 4.9 billion –just short of the $5 billion target, increasing by 9.2 per cent from 2013. This meeting is expected to bring the country closer to an ambitious new export target of $10 billion set by the apparel industry, which it aims to achieve by 2025.
The visiting international buyer team, flown in by EDB included representatives from Brazil’s Casas Pernambucanas, Grupo Guararapes, Cia Herring, Australia’s Pilot Athletic, Cotton on Group, Bein Sports, and Auluaulu International, Denmark’s Day Birger Mikkelsen, and India’s Raymond Apparel. Apart from visiting the EDB facilitated factory visits of Lankan manufacturers, the buyers also took part in Sri Lanka Design Festival event in Colombo on November 26, 2015.
The EDB’s work to facilitate the buyer delegation started in 2012. As a result, a year ago, the first Lankan apparel industry delegation visited Spain’s Inditex. www.srilankabusiness.com
To cater to the rising domestic demand Saudi Arabia has decided to increase imports of readymade garments, medicine and some other quality products from Bangladesh. Saudi Arabia’s finance minister Ibrahim bin Abdulaziz Al-Assaf has said to have conveyed the decision to Bangladesh’s finance minister AMA Muhith at a meeting, held in Riyadh.
During the meeting, the two ministers agreed to explore investment and trade opportunities by sharing experiences, funding and arranging training. Discussions also revolved around letting a Bangladeshi commercial bank open a branch in Saudi Arabia, which could help promote business transactions between the two countries. While apprising the Saudi Arabian side about the recent initiatives and measures for social and economic development in Bangladesh, Muhith sought more funding support from the Saudi government in various projects including a project for building a fertiliser factory. He also urged his Saudi counterpart to recruit quality manpower from Bangladesh.
The Bangladeshi minister also appreciated the active participation of Saudi delegation in the 11th session of the joint commission between the two countries held in Dhaka recently, where important decisions were taken to intensify bilateral cooperation, particularly in the areas of trade and investment.
ERCA, a group of chemical companies headquartered in northern Italy near Bergamo unveiled some of its innovative and sustainable technology solutions for the textile industry at the recently concluded ITMA 2015.
The company that operates seven plants in Italy, Poland, Turkey, Brazil, China, India and will soon be extending its services with facilities in Malaysia. The solutions engineered by ERCA aim to encompass the environmental and ethical requirements that textile dyers and finishers have to meet in accordance with the commissioner’s standards. Some of the innovations on display at ITMA included ReactEVO - a simple and efficient process based on a new post-treatment concept in dyeing with reactive dyestuffs that leads to a drastic reduction in energy consumption and water volumes, significantly cutting the total treatment time. The product is also said to produce significant sustainability benefits. ReactEVO allows energy savings of up to 70 per cent, water savings to 50 per cent and processing time up to 20 per cent, according to the company. All ReactEVO auxiliaries (DYE, WBS, PHR and TWE) are also confirmed compliant with Oeko-Tex Standard 100 requirements and are bluesign and GOTS approved.
ERCA, in collaboration with multinational Japanese manufacturer, Asahi Kasei, has also developed a new dyeing process called OneTone. The process is the result of a study undertaken to dye Asahi Kasei’s ROICA Colour Perfect, an innovative and fully dyeable premium stretch yarn that is said to offer great tone on tone colour depth and an imperceptible matt aspect that can be used to match dye with all major fibres such as cellulose, nylon, wool and silk.
www.itma.com
According to the estimates by the Vietnam Textile and Apparel Association (Vitas), the garment and textile sector in the country is expected to grow its exports by an average of 11.5 per cent per year between now and 2020.
Vitas report said the sector is expected to generate export revenue of $27.5 billion this year, and increase this value to $31 billion next year and $45 billion to $50 billion by 2020. In the first nine months of this year alone, Vietnam's garment and textile exports totalled $20 billion, an increase of 10 per cent over the same period last year.
Vu Duc Giang, who elected Chairman of the Vitas at a congress last week, said that global integration will facilitate Vietnamese garment and textile products over the next five years. Tariffs for these products will reduce from 18 per cent to zero per cent following the Trans-Pacific Partnership (TPP), and from an average 11 per cent to zero per cent following the Viet Nam-European Union Free Trade Agreement.
The garment and textile exports to this market may hit $20 billion by 2025. Vietnam has been among the top 10 garment and textile exporters in the world for the last 10 years. Last year, it ranked fifth after China, Turkey, Bangladesh and India.
The country exports its products to 180 countries and territories, with the United States, the European Union, Japan and South Korea being major markets. It is also exploiting emerging markets such as Russia and Australia.
www.vietnamtextile.org.vn
Zinser has been supplying ring spinning machines to Indonesian company Indorama Synthetics, having \spinning mills in Indonesia, Uzbekistan, Sri Lanka and Turkey, since 1980. The company has now commissioned its 100,000th Zinser spindle: a 2Impact FX compact spindle to the company.
This milestone was marked at a small ceremony at ITMA 2015 in Milan, where Martin Folini, CEO of Saurer and Saurer Schlafhorst, and Henri Wiggers, regional sales and service director of Schlafhorst Zinser, presented the ‘Golden Zinser Spindle’ to the Director of the spun yarns division of Indorama, Anupam Agrawal and Virender Kumar Bhalla, Manufacturing Head of Indorama.
This year Zinser delivered over 40,000 2Impact FX compact spindles to Indorama. Following the installation of all machines, Indorama now has around 140,000 Zinser spindles. The compact spinning machines process 100 per cent combed cotton to produce particularly high-quality compact yarn in counts ranging from Ne 20 to Ne 40. They are integrated into a fully automated linked system extending from the Zinser roving frame to the Autoconer package winder from Schlafhorst. For many years Indorama has been producing yarns of 100 per cent polyester on Zinser 351 ring spinning machines.
www.zinser.de
www.indorama.com
