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Following the recent terror attack in Gulshan, global buyers and brands asked Bangladesh’s RMG exporters to meet them outside Bangladesh for business deals for the upcoming season. Some buyers have already postponed their visit and scheduled their meeting in a third country on security grounds. The apparel makers apprehend that besides production cost hike, they might lose orders as well, if the current situation in the country continues unabated.
Moshiul Alam Sajal, managing director of Posmi Sweaters said that three of his buyers from Italy, France and Spain asked him to get ready for a meeting in a third country for negotiation of new orders for the coming season.
Like Sajal, a good number of manufacturers are facing the same problem. It costs over Tk4 lakh to meet the buyers in a third country, but the main problem is that a third-country meeting prevents the manufacturers from displaying a whole lot of samples since it is not possible to carry a good number of styles with them, they said.
For that the government has to take measures to ensure the safety of foreigners, Sajal said, suggesting that the government should unearth the root of militancy and bring them to book to prevent further attacks.
Bangladesh’s apparel sector have urged the government to fix 0.70 per cent tax at source on export as a final settlement instead of making it just a minimum rate. The call came from Bangladesh Garment Manufacturers and Exporters Association (BGMEA) in a letter to the Finance Minister AMA Muhith. BGMEA President Siddiqur Rahman has said the rate was earlier reduced to 0.70 per cent from 1.50 per cent in the proposed budget.
The letter says that although the budget for the FY16-17 proposed to set tax at source on export to 1.5 per cent for apparel exporters, the rate was later reduced to 0.70 per cent following the intervention. If the tax at source of 0.70 per cent is considered as minimum tax, there are possibilities of imposing other higher taxes and there are also possibilities of harassment to entrepreneurs which will make the income tax return submission process more complex, it added.
Urging the Finance Minister to intervene in the matter, the BGMEA President also requested him for giving necessary instructions to the National Board of Revenue (NBR) for amending the income tax ordinance and issue necessary diktats to consider tax at source on export for the apparel makers as final settlement which the RMG makers enjoyed before. So far the apparel makers have enjoyed tax at source on export as final settlement. However, the FY17 budget turned 0.70 per cent tax at source on export as minimum tax. During the last fiscal year, the readymade garment (RMG) makers were enjoying 0.60 per cent tax at source on export which was considered as final settlement.
A United Nations research has found out that soaring temperatures, caused by climate change, may cost global economies more than $2 trillion by 2030. It would also restrict working hours in some of the poorest parts of the world. As many as 43 countries, mainly those in Asia, including China, Indonesia, and Malaysia, will experience decline in their economies because of heat stress, according to Tord Kjellstrom, a director at the Health and Environment International Trust based in Nelson, New Zealand. As a result, China’s gross domestic product would reduce 1 per cent and affect that of Indonesia by 6 per cent by 2030.
According to the paper published in Asia-Pacific Journal of Public Health Extreme, heat in Southeast Asia already curbs annual working hours by 15 to 20 per cent and that figure could double by 2050 as climate change continues. The study was one of six papers published by the UN University in Kuala Lumpur that details the impact of climate change on human health. From 1980 to 2012, the study said about 2.1 million people worldwide died as a direct result of almost 21,000 natural catastrophes such as floods, mudslides, extreme heat, drought, high winds or fires. The cost of those disasters exceeded $4 trillion, a sum comparable to the current GDP of Germany.
In 2030, in both India and China, the GDP losses could total $450 billion, it is being said. The impact could be reduced by making a major shift in working hours and changing the methods of how new factories are built to require less power to cool. Low and middle income countries are more likely to lose productivity Richer countries will largely avoid losses from heat, the study found. Russia, Norway and Sweden may see productivity dip as a result of colder winters.
Heat stress is more likely to restrict low-paid and low-skill jobs such as heavy labour, farming, and manufacturing. That has the potential to increase the gap between rich and poor. Demand for air conditioning in offices, shopping malls and homes are likely to soar as temperatures rise placing a strain on power supplies, according to the paper.
Fast fashion giants have ventured into textile recycling. Inditex, the parent company of Zar,a has committed to the circular economy model in all phases of the product cycle. Starting in Spain this September, Zara will offer shoppers free at-home collection of used clothing when delivering online orders. The company will put garment collection containers throughout its store network. The clothing will be recycled for the development of new textile raw materials.
Meanwhile Inditex has inked an exclusive agreement with Austrian fiber supplier Lenzing for the production of premium textile raw materials made from fabric waste generated by Inditex. Inditex will provide Lenzing with roughly 500 tons of textile waste, with the aim of raising this to around 3,000 tons within a few years. This will enable the Austrian company to produce around 48 million garments.
Closing the loop in textiles is a priority for Inditex—the company will support research into technology that will turn recycled garments into new textile fibers. Similarly, Swedish retailer H&M is also moving toward a 100 per cent circular business model, collecting more than 12,000 tons of unwanted garments in its stores in 2015 alone. Last year, it made more than one million products containing at least 20 per cent recycled material from collected garments.
Hundreds of thousands of garment workers in Tamil Nadu have got a pay rise of up to 30 per cent. The workers, including cloth cutters, tailors and button makers - will also get an additional inflation-linked allowance. In its July 13 ruling, the court asked manufacturers to immediately pay the revised wage as well as arrears backdated to December 2014. If this happens, workers would see their pay rise from a monthly average of Rs 4500 to Rs 6500.
But clothing manufacturers and exporters, who supply many international brands, said the new wages would be practically impossible to introduce given the tough global market conditions. They say the wage rise is unrealistic given the stiff competition they face from countries like Bangladesh and China.
India is one of the world's largest textile and garment manufacturers. The $40 billion a year industry employs around 45 million workers. Under the Minimum Wages Act, introduced in 1948, state governments are required to increase the basic minimum wage every five years, but textile manufacturers have repeatedly challenged these pay rises in Tamil Nadu. The last time the state government revised pay was in 2004. But the matter went to court immediately and the increase was not implemented.
Pakistan’s Senate Standing Committee on Textile has expressed concern over falling cotton production in the country. Senator Mohsin Aziz says, export-oriented cotton crop, 80 per cent of which is being used for the value-added products to be exported, has seen a sharp decline since last year. This should be stopped by taking special measures in this regard. He was speaking while presiding over the committee yesterday.
Aziz said it was because of this, cotton growers were not receiving fair price against their products. And that was the reason why they were diverting to cultivation of other cash crops like maize and sugarcane. He rued the textile industry was crippling due to the non-existence of any solid policy in the textile sector. The committee was informed that last year, cotton production in Punjab witnessed a decline of 43 per cent compared to the preceding year mainly due to unprecedented rains in the area. The committee was also informed that in Punjab, cotton was being cultivated on 430,000 acres land this year as compared to 540,000 acres in 2014. This shows that in the next season the production of cotton would slide further.
By focusing on flexibility, rapid delivery times and customised solutions, Italian textile companies are relying on innovative production technology. Fabrics carrying the Made in Italy label are always popular – a trend that is generating good business for machine builders. Italian weavers depend on Karl Mayer’s warp preparation machines. And Karl Mayer’s warp preparation business unit has also spotted this trend for expansion and renewal.
The Giro-O-Matic 24 and the Multi-Matic 128 sample warping machines and the Nov-O-Matic automatic, short-warp sectional warping machine have proven to be real bestsellers. The reason customers are interested in these innovative machines is their high operating speeds, exceptional beam quality, and their advantages in terms of the number of operatives needed to operate automatic systems. The performance of these machines is quite unique. They are currently without rival, and are in especially high demand in the weaving cluster.
Karl Mayer’s order books are full. It saw an increase in orders in 2014, but the real boom started in 2015, which is expected to continue until 2016. Italy represents elegance and exclusivity in fashion like no other country, and this country still heads the top price bracket. Premium Italian fabrics enjoy an excellent reputation, and are finding new customers in the emerging economies, where great importance is attached to high-end brands.
ITMA Asia + CITME, the exhibition for textile and textile machinery, is coming back to Shanghai this year. It would be held from October 21-25 at a new location- the National Exhibition and Convention Centre (NECC). Despite some talk within about the show’s decision to run on a biennial schedule rather than the expected four-year cycle, this show at Shanghai coming up on the heels of a successful ITMA 2015 in Milan, Italy, promises to be a well-attended event.
Organizers of the show have reported that approximately 1,600 exhibitors from more than 27 countries are expected to participate in the show this October. At the close of space applications for exhibitors, more than 90 per cent of the 180,000 square meters of exhibition space had been sold out, it has been disclosed. In addition, the organizers hope to attract more than 100,000 trade show visitors from around the globe.
The show is owned by the European Textile Machinery Manufacturers Association (CEMATEX) and its China-based partners, the Sub-Council of Textile Industry, CCPIT (CCPIT-Tex); China Textile Machinery Association (CTMA); and China Exhibition Centre Group Corp. (CIEC).
The event is organized by the Beijing Textile Machinery International Exhibition and co-organized by MP Expositions. In addition, the Japan Textile Machinery Association (JTMA) is a special partner of the show.
Cotton cultivation in India has declined by 8 per cent this year. Reason: a large number of cotton growing farmers have switched to food crops such as soybean for better returns. Generally, farmers prefer cotton as it requires less of water. Recession in the global market last year, however, has led to a crash in cotton prices. In addition, poor yields and high cultivation costs have made cotton less lucrative over the years.
Last year's recession in the cotton market, reduced exports to China and the US, international stock hoarding and skewed minimum support price are supposed to be the prime factors behind the sudden decline in cultivation of this cash crop.
Barring Punjab, Gujarat and MP, all cotton growing states have witnessed a huge drop in acreage this year. Tamil Nadu topped the chart with one-third of the cotton land going to other crops. Maharashtra – the second largest cotton growing state in the country after Gujarat – has witnessed a nine per cent decline in cotton sowing. The total cotton output of India is also expected to be 352 lakh bales, compared to 380 lakh bales a year ago.
The domestic textile industry might bear the brunt of all this. Anticipation of low cotton production has already led to a sudden jump in cotton and yarn prices. This spells a tough time for the sector that is already under stress due to the skewed global demand for the last two years.
"Fashion retailers are feeling the heat from warming winter. According to Co. Design, a Patagonia spokesperson, climate change ‘a serious crisis’ for its business. And while retailers like J. Crew, H&M, and Nordstrom decline to comment, the numbers speak for themselves. Uniqlo, H&M, and Gap all announced major seasonal shortfalls this year, and Macy’s is actually cutting more than 4,500 jobs following slumpish holiday sales, blaming 80 per cent of its revenue shortcomings on cold-weather goods like jackets, hats, and scarves that just didn’t sell."
Fashion retailers are feeling the heat from warming winter. According to Co. Design, a Patagonia spokesperson, climate change ‘a serious crisis’ for its business. And while retailers like J. Crew, H&M, and Nordstrom decline to comment, the numbers speak for themselves. Uniqlo, H&M, and Gap all announced major seasonal shortfalls this year, and Macy’s is actually cutting more than 4,500 jobs following slumpish holiday sales, blaming 80 per cent of its revenue shortcomings on cold-weather goods like jackets, hats, and scarves that just didn’t sell.
Experts in the fashion industry are already speaking openly about how climate change is transforming their business models, their designs, and the very notion of seasonal fashion itself.
Preplanning collections
It’s a common practice for winter fashion to hit shelves in July. Those heavy pieces may have hit catwalks and started the journey to production anywhere from 6 to 18 months before they arrived in a store. And yet, for all this preplanning, nobody buys a winter coat in the sweltering days of summer - and some brands are beginning to question the long lead time.
Says Yael Aflalo, Founder and CEO of fast US fashion brand Reformation, typically the way the industry is set up is a little odd, where you sell sweaters in July in anticipation of September. It becomes this game of racing to get a fresh product a little too early. Most people buy sweaters when it’s cold outside. Aflalo has built her business on limited-run clothing, produced only four to six weeks before it reaches shelves. This year, as warm weather stuck around, the company's unusually short production pace paid off and allowed it to quickly reassess how much winter stock it really needed.
Meanwhile, retailers have capitalised on delays that had summer items arriving in Fall. Rebecca Minkoff admits that her business had a lucky break in this seasonal scheduling. While they had planned to ship a suede jacket in July, a delay in the tannery pushed it back to October and November. To anyone outside the fashion industry, the idea of garments that are produced during the season in which they'll be worn seems obvious and logical - especially when it's increasingly tough to know what weather the next season has in store. In fact, that’s why Minkoff is changing the timing of seasonal shows. Instead of wooing retailers several seasons in advance to place speculative orders on what people might want months in the future, Minkoff is running consumer-facing runway shows closer to actual ship dates.
Traditionally, designers show their Fall line in February -- seven to eight months before anyone wears it. Minkoff is showing Spring in February, just a month before the season starts. This new show strategy, helps as consumers not just retailers have the option to buy the entire line right then. Not every retailer will be able to change its seasonal show schedule. As Minkoff points out, larger, more traditional retailers will need to learn how to juggle inventory across regions. If a city is colder than expected, these retails should have systems for getting those stores the cold goods, ASAP.
Designing for future
To some extent, the global, jet setting economy has already pushed designers to consider new, more environmentally-flexible fabrics. With everybody traveling so much, there’s a lot of things like lightweight wool that goes from tropics to winter places, or smart fabrics that can respond to clues in the event to get warmer or cooler. Some of the big companies interested in techno luxury, like Venia, are exploring those.
Adapting doesn’t necessarily need to be as complicated as inventing in super-advanced fabrics. For Reformation, it was a matter of skewing towards the right textiles and designs. Aflalo says, people are going to be more opting for things like medium weights. And as the weather stayed warmer than expected this fall, the company countered by releasing a more balanced assortment of middle weight items, more things like dresses, basic tops, more jeans, more things that are not as dependent on weather. The more obvious shift may not be the timing of clothing sales, but the design of the clothing itself.
Ironically, even in warmer climates, traditional winter fashion continue to define warm winter fashion. The heaviest of coats and sweaters, when produced in more limited supplies, will inherently become the statement pieces of the season, the rarer luxury garments for those who can afford to do more than dress in layers 12 months a year.
Winter seasonal items may no longer designed around the bulky, functional necessity of warmth, meaning they could be defined by a whole new aesthetic. Aflalo believes in human creativity. When there's less ability to be creative, then you figure out how to be more creative. Humans are remarkable creatures like that, she concludes.
