FW
As per World Trade Organisation (WTO) rules the Centre has decided to phase out direct subsidies scheme facilities for textile exporters by December 2018. WTO rules do not permit least developed and developing countries to give benefits to its exporters when a sector achieves 3.25 per cent share in global exports.
In the case of textile industry in India, it had crossed the above mentioned threshold in 2010 itself. At present, India has 5 per cent share in global textile and garment trade. The WTO rules state subsidy offered to that particular sector has to be weaned off within eight years.
If any objection is filed by members for the delay in fitting into WTO ruling within the said deadline, the country which fails to comply with norms are provided more time to introduce required changes in the rules.
India has also been facing pressure from the US to introduce new norms under its textile policy. The US claims all forms of export subsidies offered for the sector should have been abolished by 2015 as India had reached “export competitiveness” in textile and clothing no later than 2007. However, exporters need not be worried as the commerce ministry is mulling rolling out other policies considering the WTO rules such as ones for quality upgradation and subsidising capital expenditure.
The government has also assured these changes will be take effect gradually so popular schemes like Interest Subvention or Merchandise Export from India Scheme will not be removed immediately. Moreover, policies and schemes equivalent to the ones being phased out will be put in place.
The Vietnamese textile industry has attracted more than $750 million FDI in the first six months of this year. In early 2017, Chinese investors invested $220 million in the Billion Vietnam polyester synthetic fiber plant. However, other capital flows consist mostly of capital expansion investments in existing projects.
The Far Eastern Group from Taiwan increased its investment capital by $485.8 million in its polyester and synthetic fiber production project, Far Eastern Polytex. The project was green lighted in June 2015, with a registered investment capital of $274 million, and the capital increase will push the total registered investment to approximately $760 million dollars. This capital increase of nearly $500 million makes Far Eastern Polytex one of the largest projects to be certified in 2017.
As one of the largest textile exporters in Asia, Vietnam’s total value of garment and textile exports has increased in the last decade. In 2017, the industry is expected to grow by seven per cent. In recent years, thanks to competitive labor costs and preferential policies, Vietnam has become the ideal destination for investors in the textile industry.
The amount of FDI in textile and apparel industry in the last decade has helped Vietnam become one of the five largest textile and apparel exporters in the world.
Bangladesh’s apparel makers are against the tenure extensions of Accord and Alliance. They do not want Accord and Alliance to stay in the country after 2018. They have however, expressed gratitude to the two western retailers’ platforms for extending support to resolve problems and improve workplace safety in the country’s readymade garment sector.
Their tenure will expire in mid-2018. More than 15 brands and retailers including H&M, C&A, Loblaw, Primark, Inditex and PVH and two global rights groups - UNI Global Union and IndustriAll Global Union - on June 29 signed an agreement in Paris to extend Accord's tenure for three more years till 2021.
The agreement puts greater emphasis on the rights of workers to organise and join a union, recognising that workers' empowerment is fundamental to assuring workplace safety, and also presents the possibility of Accord expanding to sectors other than the readymade garment industry.
Meanwhile Bangladesh’s apparel makers have demanded cash incentives, a separate exchange rate of dollar for exports, a reduction in bank interest rates and gas prices and other infrastructural costs to help the sector be price competitive. They want the sector’s image to be refurbished through effective public relations activities.
Raymond UCO Denim expects continued growth as the denim market in India continues slow-paced expansion. Started in 1996, the company is still producing denim and looking to expand its reach. The company launched a three year “2020 strategy” in which they aim for double digit CAGR in their topline. Arvind Mathur, CEO of Raymond UCO Denim says FY 2016’s fabric capacity expansion project has now stabilised and “turnover of Indian operations is expected to grow at a healthy CAGR” over the next three years.
The current weaving capacity of all company’s factories is over 50 million metres and the main focus is on multi count yarn fashion denims. Fabric manufacturing facilities are located in Maharashtra and Romania and cover yarn spinning, weaving, dyeing, and finishing.
Raymond UCO is now looking to grow certain product categories and penetrate deeper into markets they have a foothold in after expanding its fabric production Using the light asset model, growth is planned through continuation of collaborations with denim brands and pioneering new styles according to customer demand. Mathur stated that the denim market in India is growing at a rate of between ten and 15 per cent.
On future direction of denim in India, Mathur gives top five predictions on denim fabric preference trends for the coming seasons will be primarily driven by comfort and performance. Stretch as a product category will grow. Bi-stretch, soft super stretch, sustainable and performance denims will be in the limelight. The knit look will continue to dominate the domestic market.
The United States is the world’s most attractive consumer market. It offers unmatched diversity, a thriving culture of innovation, and the most productive workforce. Companies of all sizes – from start-ups to multinationals – can find ideas, resources, and market to succeed and grow. The United States attracts innovative and industrious manufacturers from a wide variety of industries around the world.
FDI in US manufacturing is growing at an average annual rate of nearly nine per cent, one of the fastest growth rates in the country. There are many reasons global manufacturers choose the United States. Made in America represents high-quality, reliability and service to increasingly demanding global consumers. Proximity to customers in the world’s largest market, access to raw materials, and independent, low-cost energy sources help US manufacturers minimize supply chain risks and reduce costs. A thriving innovation ecosystem encourages game-changing product and process innovation.
US workers are among the most productive in the world – a key reason why more than 2.4 million US jobs in manufacturing are supported by FDI. For many, manufacturing in America is not only key to making it in America but also to their global success.
When global companies choose the United States, they’re tapping into a vast consumer market. Additionally, they are able to utilize one of the most competitive export platforms in the world.
Kitex Garments’ standalone revenue for Q1 registered a 9.1 per cent year on year increase. Ebitda margin stood at 27.7 per cent. Ebitda for the quarter rose by 6.3 per cent year on year with a corresponding margin contraction of 72 basis points. This margin contraction was led by an increase in other expenses and cost of materials by 36 per cent year on year and 26 per cent year on year. PAT for the quarter fell by 15.2 per cent year on year.
Cochin-based Kitex exports cotton garments, especially infant wear, to the US and Europe. The company has two segments: garments and fabrics. In fiscal 2016-’17 the garment segment contributed 84 per cent to sales and fabrics 16 per cent.
Kitex, is in the process of upgrading its facilities to expand capacity. It is a vertical set-up with knitting and processing of fabrics while finished garments are done in-house. The facility covers an area of 1,80,768 sq. ft.
The factory is equipped with latest sewing machines that ensures stain-free, quality sewing. The state-of-the-art spectrophotometer ensures electronic color reading and transmission. The plant produces knitted fabrics of exceptional quality.
Egypt’s Ministry of Trade and Industry has signed a cooperation protocol with United Nations Industrial Development Organization (UNIDO) and the Italian Development Cooperation. The ministry says the two-year $1.72 million project aims to increase the added value of Egypt’s long and extra-long staple cotton, improve the performance of cotton farmers and producers, and maximize the role of institutions supporting cotton production.
The development comes as Africa gets renewed attention as a textile and apparel sourcing region after years of what the industry saw as untapped potential and the 2015 renewal of AGOA, the African Growth & Opportunity Act U.S. trade preference program for 10 years.
According the Commerce Department’s Office of Textiles & Apparel Egyptian cotton is prized for its premium extra-long staple fibre, production and exports have been on the decline. Textile and apparel imports into the US from Egypt were worth $363.38 million for the first five months of the year. The project will be implemented over two years and will include building the capacity of 400 cotton farmers and 15 private companies in the textile business, improving the skills of 300 workers and offering training programs for 300 technical students.
This month, the US Agency for International Development East Africa Trade and Investment Hub signed a grant with Kenya to create 2,000 full-time jobs and provide more than 100,000 hours in skills development for young workers in the apparel industry. According to USAID the signing of the grant also marked the kick-off of East Africa Cotton, Textile and Apparel Workforce Development Initiative, a partnership between the Hub and the American Apparel & Footwear Association to ensure U.S. brands and retailers goods are manufactured in accordance with “best business practices and operations” in East Africa.
DuPont has launched Intexar smart clothing technology, which is a new generation of stretchable electronic inks and films for smart clothing.
With Intexar, ordinary fabrics can be transformed into active, connected, intelligent garments that provide critical biometric data including heart rate, breathing rate, form awareness and muscle tension. The newly achieved technology offers superior stretch and comfort and is easily integrated into garments to make smart clothing.
Wires and bulky devices that don’t stretch and move with the body when playing sports are things of the past. Intexar is a game-changing technology that will truly move the needle in making smart garments as comfortable as regular fitness clothing. Available as a suite of premium and high-performing stretchable electronic inks and flexible substrates, Intexar is seamlessly embedded directly onto fabrics using standard apparel manufacturing processes to create thin, form-fitting circuits. Garments powered by Intexar can endure over 100 washes and continue to perform through repeated stretching and demanding performance.
DuPont has two smart clothing garment brands powered by Intexar technology. This garment embeds DuPont Intexar to enable real-time monitoring and data collection, such as, for instance, heart rate, breathing and muscle movements. The second OMsignal, displays two products: a high-end fitness sports bra and a comfortable, attractive lifestyle bra.
Punjab and Maharashtra have asked cotton farmers to step up pesticide sprays to ward off potential harmful bug attacks. Despite plentiful rains in most parts of the country, monsoon has been patchy in some areas of Punjab and Maharashtra. Dry weather conditions encourage pest attacks like the plant-eating whitefly.
While Punjab is not a major producer of cotton, Maharashtra is the second-biggest grower of the fiber. Farmers in Vidarbha and Marathwada regions have been asked to be vigilant for the next eight to ten days, when the crop is vulnerable to pest infestations. Whitefly hit cotton crops in Punjab and neighboring Haryana in 2015, when India suffered back-to-back drought years for only the fourth time in over a century.
India grows cotton on 11 million to 12 million hectares and is likely to have harvested 33.63 million bales in the 2016/17 season that started on October 1, slightly down from 33.78 million bales a year earlier. Cotton output has jumped fourfold since India allowed the genetically modified variety in 2002, transforming the country into the world’s top producer and second largest exporter of the fiber. Monsanto's lab-grown seeds yield nearly all of the cotton produced in India.
Clariant, a world leader in specialty chemicals saw sales for the first half of 2017 rise nine per cent. Organic growth amounted to five per cent driven by higher volumes. Growth was most pronounced in Europe, Asia and North America. Sales in Europe rose eight per cent while recorded 11 per cent growth in Asia supported by the strong sales development in China. Sales in North America increased 14 per cent. Latin American sales were three per cent lower against a strong comparable base and also reflect the macroeconomic environment which remains challenging.
Net income soared by 20 per cent. This expansion was supported by improvement in absolute Ebitda before exceptional items as well as lower finance costs. Good growth dynamics in June and the expected favorable demand in coming quarters led to higher net working capital. This factor together with changes in other current assets and liabilities offsets the positive influence of the Ebitda improvement.
Net debt increased slightly. This reflects the usual seasonal increase seen in the first half of the year. For 2017, Clariant is confident of achieving targets i.e. growth in local currency, progression in operating cash flow, absolute Ebitda and Ebitda margins before exceptional items in spite of a temporarily weaker cash flow in the first half.
