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A South African business delegation from a cross-section of key sectors of its economy would visit Zimbabwe later this year on a trade and investment mission.
The objective of this mission would be to increase trade and investment between South Africa and northern neighbor Zimbabwe. Trade between the two countries topped $ 4.2 billion last year.
According to South African’s Department of Trade and Industry (DTI), the country would sponsor selected entities looking to increase exports and services to Zimbabwe or seeking opportunities for investment.
There are a number of leading South African companies that have already established in Zimbabwe. Among them are Pretoria Portland Cement (PPC),Tongaat Hulets Zimbabwe, Old Mutual Zimbabwe, MBCA Bank, Pick n’ Pay, Metallon Gold and Zimplats.
Further, South Africa is Zimbabwe’s biggest trading partner while Zimbabwe ranks among the top three major trading partners of South Africa. About 70 per cent of Zimbabwe’s export go to South Africa.
Companies qualifying for sponsorship on the trade and investment mission will be drawn from agriculture and agric-processing, infrastructure, engineering, energy, mining and capital equipment, textile, leather, footwear and electro technical sectors.
According to the DTI, this measure will present an ideal platform for South African companies that would like to export value-added products and services and for companies that are looking for investment opportunities and joint venture partnerships in the aforesaid market.
The Department has notified that companies will be screened and selected in line with the guidelines and market requirements of the Export Marketing and Investment Assistance (EMIA).
The objective of this mission is to increase trade and investment between South Africa and northern neighbor Zimbabwe. Trade between the two countries topped $4,2 billion last year.
The Department also said that it would provide hotel accommodation on bed-and-breakfast basis; an economy class return airfare to a maximum of R17,000 and freight/excess luggage up to R2,000 to approved firms.
Zimbabwe requires significant investment in various sectors of the economy to increase the amount and value of exports as it has consistently been recording trade deficits over the past two decades.
"As China is losing its cost advantage, foreign firms are starting to look at Asean as a more attractive destination. China's competitiveness is eroded by lower labour costs in Thailand and emerging Southeast Asian economies, prompting a growing number of businesses to relocate their production from the mainland to Asean. "
As China is losing its cost advantage, foreign firms are starting to look at Asean as a more attractive destination. China's competitiveness is eroded by lower labour costs in Thailand and emerging Southeast Asian economies, prompting a growing number of businesses to relocate their production from the mainland to Asean.
What is less known is that managerial and professional salaries in China have also been climbing, even though the trend in location shifts has been clear for a few years and this has become a factor in some investors' decisions about where to set up production.
Base salaries in Thailand and emerging economies in Asean are now substantially lower than those in mainland China, reveals a recent research by the global advisory and broking company Willis Towers Watson. Thailand and Malaysia are the lowest payers at the top management and senior management levels, respectively. Also, Thailand offers more attractive average pay rates across the professional, middle and senior management levels.
Advantage Asean
Pichpajee Saichuae, MD of Willis Towers Watson Thailand feels labour cost is no longer a strong selling point for China, while it continues to encourage foreign investment. Nowadays, all Asean countries are cheaper than China in terms of salaries and overall labour cost, making these countries more attractive to foreign investors. Among Asean countries, Thailand provides significant advantages in terms of human resources costs compared to its Asian peers. This is an important element that might push a number of international companies to reconsider where to relocate their operations in Asia.
Said Rolf-Dieter Daniel, president of the European Association for Business and Commerce (EABC), manufacturing costs in China have been on the increase for many years, especially in the coastal cities where most industrial estates are situated. As China is losing its cost advantage, foreign firms are starting to look at Asean as a more attractive destination. For labour-intensive industries, coastal Chinese cities have been trying to position themselves by upgrading their technology to reduce costs and improve quality. Many Chinese firms, for instance, are acquiring German high-tech companies for these purposes, he added.
Rising salaries a bug bear
Meanwhile, in management and professional fields, base salaries across all job grades in China are now between 47 per cent and 65 per cent higher than in Thailand and up to 44 per cent higher than in Indonesia, according to the 2015-16 Global 50 Remuneration Planning Report by Willis Towers Watson. The report shows average base salaries at the professional and management levels in Vietnam and the Philippines are the lowest in Asean. Indonesia stands out among the 10-country group's emerging economies for having the highest base salaries.
On the other hand, base salaries in Singapore, a developed economy, are far more than in Greater China and emerging Asean. Compared to Thailand, base salaries across all job levels in Singapore are higher than those in Thailand in a range of 97 per cent to 228 per cent. Across the job grade from professional level to top management, Singapore's base salaries are 3-10 per cent higher than those of Hong Kong, which is the highest paying economy in Greater China. In Greater China, Hong Kong has long been the hub for international talent. Its gap with Singapore narrows once Hong Kong's more favourable tax rates are taken into account. China's base salaries are likely to stay high to attract talent given that the country is putting greater emphasis on quality and sustainability in its products and services. Moreover, the integration of its financial markets with the rest of the world means that salaries in that sector will need to globally competitive to attract and retain the best talent.
Meanwhile, China is focusing more on R&D and higher-end, value-added production, which requires a higher skill-set. For that reason, along with proximity to other parts of the supply chain, its more mature infrastructure and skilled workforce will likely continue to attract companies, particularly when compared with emerging economies, even though China is more expensive.
High living costs
According to Stanley Kang, CEO of Taiwan-based Tuntex Textile (Thailand), as living costs have climbed sharply in China's big cities, wages have to be increased to catch up, for both blue-collar and white-collar workers. Land prices have also risen, resulting in higher costs for factory operators. Many Chinese do not want to live in big cities anymore because they cannot cope with higher living costs and thus move back to their hometowns, he added.
Meanwhile, Indonesia and Vietnam offer an abundant supply of labour with a competitive cost, said Kang. Companies in Vietnam also can still enjoy preferential tariffs including the Generalised System of Preferences (GSP) for exporting to the European Union (EU). The Trans-Pacific Partnership (TPP), if fully ratified, will pave the way for more exports from Vietnam to other member countries, especially the United States. That will give Vietnam a further competitive advantage.
Four Uzbek nationals have filed a complaint against the World Bank's private sector arm, charging that a $40 million loan to an Uzbek textile company risked stoking the practice of forced labour in the central Asian country's cotton fields. The complaint filed with the International Finance Corporation (IFC) demands an investigation into forced labour related to Uzbekistan-based Indorama Kokand Textile.
According to human rights groups, Uzbekistan operates a massive, state-orchestrated forced labour system that underpins its position as the world's fifth-largest cotton exporter.
The U.S. government's annual report on human trafficking, published recently, said Uzbek government-compelled forced labour of adults remained endemic in the 2015 cotton harvest. The complaint to an IFC ombudsman made public the charges that the private lending group does not have adequate mitigation measures to ensure its investments and are not supporting forced labour.
According to its website, the IFC, which invests in developing the private sector in emerging economies, approved the loan of up to $40 million to Indorama Kokand Textile in December 2015.
The loan aims to finance the expansion of a cotton plant in the Uzbek city of Kokan, the website said, with a view of encouraging exports. Indorama Kokand Textile, a leading cotton producer in Uzbekistan, says on its website that more 90 per cent of its production is for export to Latin America, Europe, Bangladesh, former Soviet countries as well as Turkey.
The sun came out for Texprint’s London 2016 preview (July 6-7) at Chelsea College of Arts, reflecting the upbeat, optimistic collections on display.
Nearly 200 young names, all recently graduated from BA and MA textiles and textiles-related courses throughout the UK, were interviewed through June. From a 13-day marathon of interviews led by Texprint creative director Peter Ring-Lefevre, 24 names were chosen. Helen Howe, an American designer among those selected by Texprint, studied Knitted Textiles at London’s Royal College of Art.
Individual resilience and marketing acumen are talking points this year. In a fiercely competitive market, designers have to be able to explain and market their work effectively. Another talking point is the growing importance of digital skills. While hand drawn or painted expertise is rightly prized and valued, the modern textile designer needs to be digitally confident. Crimson Rose O’Shea, short-listed for the Texprint Pattern Award, evolved a two-step strategy in her own personal development.
From the final 24 designers, a panel of distinguished judges selects the Texprint award winners in four categories: Fashion, Interiors, Colour, and Pattern. The shortlist was announced on the same day, but the winners are not revealed until Première Vision in Paris on September 13 (the Texprint designers’ exhibit at Première Vision Designs, which is located within the main PV).
With the passing away of the peak demand period in China for fibers, prices of synthetic fibers used in apparel have started to dip in the Asian market.
Spot price of polyester filament which is used in shirts was $1.12 to $1.13 a kilogram at the end of June, 2-3% less than that in April. Polyester staple, which is used in futon filler, was priced at 81 cents per kilogram at the end of June down 10% in two months.
Prices of ethylene glycol and high-grade terephthalic acid have risen due to some plant stoppages since June. But with orders expected to remain weak until around September when demand related to spring and summer clothing lines typically picks up, prices are likely to remain sluggish.
In addition, psychological unease about a sluggish global economy in the wake of the U.K.'s decision to exit the European Union could further weaken prices.
The Clean Clothes Campaign and the International Labor Rights Forum are happy with the fact that a scheme set up by them to provide compensation to people affected by the Tazreen Fashions fire of 2012 has ended with the settlement of claims of survivors and also to the dependents of those who were killed in the fire.
The Tazreen Claims Administration Trust, which used a system for calculating and distributing awards based upon a similar initiative designed for those affected by the Rana Plaza building collapse, announced last Friday that the work to disburse claims, carry out medical assessments, calculate amounts owed to each beneficiary and distribute payments was complete.
It may be remembered that on 24 November, 2012 a fire ripped through the Tazreen Fashions garment factory in Bangladesh killing 113 workers and injuring nearly 200.
Three years later in September 2015, the Tazreen Claims Administration Trust was set up as a result of an agreement signed in 2014 by C&A, C&A Foundation, IndustriALL Global Union and the Clean Clothes Campaign. This agreement led to the establishment of the Tazreen Claims Administration Trust in October 2015.
In November 2015, $2.5 million was put into a fund set up to cover the cost of the awards by brands that sourced goods from Tazreen Fashions. The remainder of each award had already been provided through payments made in the immediate aftermath of the fire by the Bangladesh Prime Minister’s Fund.
C&A Foundation and Fung Foundation each contributed $1 million to the fund. Smaller funds were provided by Walmart (via BRAC USA), KiK and El Corte Ingles.
Amid rising labour costs there, the Japanese garment industry has more or less shifted production from China to Bangladesh and other Asian countries.
But even after last Friday's terrorist attack in Dhaka, Japanese clothing makers will continue to do business in Bangladesh as it remains important both in terms of sales and production. However, the Japanese would demand additional security, it is understood.
Fast Retailing, the operator of the Uniqlo casual wear chain, is one of the major Japanese companies that is conducting business in Bangladesh. The Japanese company established a joint venture with Grameen Bank's local unit to operate stores and set up a production office to supervise factories.
Fast Retailing has been boosting production in Bangladesh along with Sweden's Hennes & Mauritz (H&M) and Inditex, the Spanish owner of Zara. These so-called fast-fashion brands are supported by their Bangladesh operations.
Some Japanese companies that have client plants in Bangladesh, such as casual clothing retailer Adastria and men's clothing store Aoki, said that they will keep their policies unchanged.
A representative of Fiber maker Toray Industries that is also operating its joint venture plant there have said that his company was not considering scaling back operations immediately given its favorable environment for exporting to Western markets. He further added that Bangladesh is one of their important production bases.
Indian Texpreneurs Federation (ITF), an apex body for textile industry in the region, has made a few fundamental and transformational suggestions to the Centre to drive textile sector towards the USD 300 billion export target by 2024-25.
In a letter to Textile Minister Smriti Irani, congratulating her for taking over the ministry, ITF Secretary Prabhu Dhamodharan said that in the last two years, the ministry had created a good platform for growth by improving the efficiency in the system and has also designed few good policies to trigger growth in the sector.
He was of the view that the domestic textile industry was now equipped with capacities to export fabrics and can capture this huge market if the ministry and industry worked in tandem.
An immediate Preferential Trading Area (PTA) with the UK would help strengthen India's position, the ITF secretary said that apart from the traditional markets, tremendous effort was required to tap new markets like Russia.
Inspite of technological advancements, India was not able to figure out the exact crop size and exact estimates and stock levels of cotton, leading to heavy speculation, as witnessed in the last 60 days when there was a 35 per cent spurt in prices, he remarked.
The government should idealise a strong mechanism to analyse and announce the exact cotton crop and stock data once a month, he suggested.
Further, he said that the fashion world was moving towards Cotton-Man Made Fibre (MMF) blends and with high MMF prices, the Indian industry was lagging behind in the fastest growing segment and duty rationalisation of MMF fibres will trigger tremendous growth in this segment.
Prabhu also requested Irani to visit important textile clusters and have a direct connect with the regional industry Associations in order to understand the scope of growth of each major clusters and start collaboration towards growth.
The biggest US apparel-focused retailer, Gap Inc. posted June sales that topped analysts’ estimates, a sign the company’s long-promised turnaround could be taking hold.
A key benchmark, total same-store sales, rose 2 per cent in June, the San Francisco-based retailer said recently. Analysts had predicted a 3.6 per cent decline, according to estimates compiled by Retail Metrics. The company’s off-price Old Navy brand led the results, with comparable sales increasing 5 per cent last month, topping the 3.3 per cent drop analysts expected.
The June results could signal that the improvement Chief Executive Officer Art Peck predicted would arrive in the spring is beginning to materialize. Traffic was bolstered by the Memorial Day holiday, which fell in fiscal June, the company said.
Trends reversed for Old Navy, which had stumbled as comparable sales slipped in six of the past eight months. In May, the company said it was shutting Japanese Old Navy stores and refocusing on North America and China.
With a good beginning of the monsoon season, the domestic textile market is expected to grow by 7-8 per cent in FY17, the Confederation of Indian Textile Industry (CITI) has said.
“The onset of good monsoon and Government initiatives may help in growth of 7-8 per cent of domestic textile market, which was estimated at USD 60 billion in FY16,” Confederation of Indian Textile Industry (CITI) Chairman Naishadh Parikh has been quoted to have said.
Welcoming the new Textiles Minister Smriti Irani, Parikh was quoted as saying that the appointment of a dynamic, progressive and result-oriented cabinet minister like Irani has come at an opportune time.
The apex chamber of textiles in India hoped that the industry would achieve the ambitious goal of creating 5 crore jobs in the next few years.
