FW
High domestic cotton prices and low polyester prices in China have made its cotton spinning sector less competitive. Prices started diverging in 2009-10 and cotton prices have remained substantially above those of polyester since then. Lack of competitive pricing for cotton, coupled with turmoil in its stock markets, has curtailed growth in China’s cotton spinning sector. Consumption is projected to reach around 7.7 million tons, far below the peak of 10 million tons in the mid- 2000s.
In recent years, mill use has shifted to lower cost countries, primarily in Asia, as cotton spinning has become less competitive in China. In 2015-16, world consumption growth will likely be limited, because international cotton prices remain higher than prices of competing manmade fibers.
World cotton consumption is forecast to grow by two per cent and reach 25 million tons, which remains below the volume consumed just before the global economic recession. In addition to China, India and Pakistan are the largest consumers of cotton and these three countries alone account for 64 per cent of world cotton consumption.
Consumption in India and Pakistan is anticipated to increase by three per cent. However, world cotton area is projected to be down seven per cent in 2015-16 to be just under 31 million hectares due to significantly lower prices in 2014-15.
The worldwide digital textile printing market for garments, home decor and industrial applications is experiencing strong growth of around 34 per cent CAGR. Europe continues as the biggest market for digital textile printing due to strong regional manufacturing industries while Asia Pacific is gaining momentum as it embraces digital printing technologies as a mainstream solution.
The shift away from mass production to more customised, colorways, and complex print designs is driven by importers, brand owners and consumers who are looking for differentiated quality products. These along with distinct operational benefits such as reduced inventory, and just in time manufacturing are the driving force that is fueling the growth in digital textile production.
Requirements for a more sustainable and environmentally friendly production are a key driver in this market. As owners and retailers become more sensitive to their product impact on the environment, as well as addressing consumer needs for creativity and customisation, they are increasingly looking to digital producers as thought leaders that are fundamentally changing the supply chain and helping them become sustainable and profitable.
Digital textile printing uses large format inkjet printers. With digital printing technology photographic and tonal graphics with multiple shades and colors can be printed on textiles.
Cotton exporters in Pakistan want incentives from the government so that cotton exports would bring stability in prices and farmers can get a fair return for their produce. They want the government to protect the interest of all stakeholders from farmers to spinners and weavers and allege that farmers are being exploited by monopolists. They warn that Pakistan would have to import raw cotton and cotton yarn to run its textile mills if it did not protect the interest of farmers.
Mills want the Trading Corporation of Pakistan to stabilise prices and save farmers from financial losses. They want a support price for seed cotton. Ginners want a ban on the shift of sugar mills to areas which have been declared as cotton belts. They say, a shift of sugar mills would change cropping patterns and harm cotton growing areas and the textile sector as a whole.
Textile mills and spinners in Pakistan have decided to buy cotton from farmers strictly according to need. Their complaint is that while a country like India gives incentives to cotton growers, ginners, and the textile sector, the government in Pakistan is reluctant to give any incentive to the stakeholders of cotton production.
A study by the Fashion Consulting Group firm reveals, the rapid devaluation of Russian ruble may result in clothing and footwear prices going up by 20 per cent in the country. Anna Lebsack-Cleymans, CEO of Fashion Consulting Group said in a statement that retailers will have to raise prices if they don't have production facilities in Russia. Olga Shteinberg, Fashion Consulting Group's press officer stated that an increase in prices will be seen in stores operating in medium and upper-medium segments of the industry. This rise in prices will impact the previous collections of some retailers as well as new collections.
The Russian currency rallied from previous lows in the first half of the year. However, the ruble started to slide again in June this year on the back of low oil prices. The fall of the ruble against the US dollar accelerated in August. Ksenia Ryasova, CEO of the Finnish brand Finn Flare, said that because of the devaluation last month, prices of the autumn collection went up by 15 per cent. Medium and upper-priced segments have been hit hardest by the ruble devaluation.
However, Ryasova added, medium segment stores such as Finn Flare cannot lower the quality of their goods, unlike cheaper retailers do. Doing so, would cause an outflow of customers. Sharp ruble devaluation and a drop in consumer demand over the past year has affected the retail sales in Russia. Falling real incomes and rising prices have forced Russians to slash their spending on clothes.
Garment manufacturers still look at East Africa despite the fact that the potential is hindered by infrastructure and cumbersome Customs processes. Exports from Ethiopia, Kenya, Uganda, and Tanzania are expected to grow as they attract more investment.
According to McKinsey & Company, East Africa will remain a niche market for garment manufacturers over the next decade. However, its success depends on the existence of free trade agreements with the US and the European Union (EU). East Africa will comprise of only a small slice of the global sourcing market, but the industry’s impact will still be important for the region. This is when the annual exports over the next decade are slated to be $700 million. Ethiopia, Kenya, Tanzania, and Uganda comprise of 0.07 per cent of global exports, earning $337 million.
With investment rising, East Africa may be a new alternative for selected large players in basic categories. This would lead to annual exports to grow to $1 billion in five years and $1.7 billion annually in the next 10 years. East Africa may move beyond cut, make, and trim (CMT) facilities. This process however, may take several years before significant numbers of vertically integrated, domestic players appear in the region. Funds to upgrade facilities and skilled workers to become a major force in the apparel sector over the 10 years will be extended to the industry.
One of the drivers for this is duty-free access to the US provided by Africa Growth and Opportunity Act (Agoa). However, the region’s garment manufacturers are looking at the EU to diversify markets. McKinsey also informs that global buyers’ preferences indicate real interest in Kenya and Ethiopia.
In its 4th year Galleria Intima held on Aug 26 and 27, organised by the Intimate Apparel Association of India (IAAI), moved to the national capital this year. Following the ‘Make in India’ initiative launched by Prime Minister Narendra Modi, IAAI aimed at facilitating greater and meaningful collaborations across all the categories of the intimate apparel sector.
Elaborating on the show concept, Rakesh Grover, President, IAAI, says,“We want manufacturers to come and make in India and set up huge plants in the country in terms of garments and raw materials. We are open to knowhow tie-ups with other countries.This platform gives Indian manufacturers an opportunity to grow to world standards. In five years we hope to be on par with international standards.”
Lingerie industry gets a boost
The Indian intimate wear industry is changing with consumers now demanding styles prevalent in the foreign countries. “A delegation of our members visited Eurovet exhibition in Paris. We saw a different world of products there and realised that this is what people back home demanded. We felt the new generation had to be offered those styles, designs, colours. The major problem was how to source them and lack of knowhow to make such products. So we thought of doing a similar exhibition in India by inviting quality suppliers of raw materials from across the world as well as from India,” avers Grover, talking about the inspiration behind Galleria Intima.
The Galleria Intima exhibition on a small scale was organised in Goa. “We got a good response from manufacturers and evolved into a sourcing exhibition and a technology upgradation platform. We now exhibit new technologies of cutting and sewing, production, software management and computerized systems. We want to upgrade the industry as a whole. We have done seminars in Europe, China and presented the changing realities in India. We also aim to increase exports from India. Right now, we have a four per cent global share in intimate wear. We want that to go to 10 per cent,” he asserts.
This edition received a good response from international buyers and exhibitors from China, Hong Kong and other countries. IAAI also holds buyer-seller meets in different cities and plans to upgrade the scale of such events.
From Goa to Delhi, the show goes on…
The change of location from Goa to New Delhi was a deliberate move since latter is convenient for business and is more accessible. Says Grover, “Goa is more of a leisure destination and because of poor connectivity, Goa event didn’t get many visitors. Delhi is connected to the rest of India via road, rail and air. And people combine their schedules so that the exhibition becomes one of the parts of their plan. So we decided to move Galleria Intima to Delhi.”
According to him, the inner wear industry is the only one that’s growing and every brand is witnessing a growth of 25 to 30 per cent. “The share of organised players is growing. Right now organised market is 40 per cent and unorganised is 60 per cent. Consumers have grown and matured and their demands have grown. They want more styles and colours and they are ready to pay the price for a good product. This has opened up the industry. Multinationals have come in and widened the price points. And the young generation is open to new things,” Grover sums up.
www.galleriaintima.com
The state government of Maharashtra has decided to finalise the proposed textile policy drafted by Suresh Halwankar, BJP MLA from Ichalkaranji, after September 11. The policy is expected to attract investments worth Rs 80,000 crores in the form of new machineries, development of new clusters and infrastructure provision.
Halwankar says, the state government has approved the policy in-principle and it is now being discussed at the secretary level to deliberate on issues like selection of locations, available infrastructure, power requirement and its supply. Sighting lack of facilities to cater to the entire cotton to garment supply chain, Halwankar said that there is not a single industrial unit, which can convert cotton into finished garments. Vidarbha region in Maharashtra produces cotton but ginning mills are in Marathwada, primary processing is done in Ichalkaranji and then it either goes to Bhiwandi in Mumbai or Rajasthan or Kanpur or Tamil Nadu as per the requirement. And final stitched product is finally shipped from Bangladesh to India.
To eliminate this lengthy process and crate employment opportunities, the textile policy has suggested several steps. The policy document says, “The textile industry is second only to agriculture in terms of importance. It has the capacity to create maximum jobs/employment after agriculture. The object of the policy is to lay special emphasis on raising processing units at various levels for assured long-term development on priority basis in the cotton producing sector, expansion of the textile industry and growth of employment in the state.”
Mahatextile.maharashtra.gov.in
A global investors’ meet will take place in Tamil Nadu on September 9 and 10, 2015. The textile and clothing sector is likely to get a cumulative investment of Rs 4,500 crores during the event. These investments will primarily be on higher value chain. The investments are set to give a substantial fillip in employment generation and stimulate ancillary industries.
Inclusion of more new projects higher up the value chain will strengthen a sector that already has elements of the whole textile value chain, from cotton to garment making. The project could also help take up the slack in demand for yarn caused by China’s burning out. There had been a lot of investment in the spinning sector between 2005-10, driven by TUF but it slackened in the meantime.
Tamil Nadu a leading state in India in textiles. It houses the country’s largest spinning industry accounting for almost 40 per cent of the total installed capacity in India. It has a complete ecosystem of textile industry. Tamil Nadu is home to the knitting industry and has the biggest knitting cluster in India, Tirupur. The state ranks first in the apparel industry and is second in textile industry in India.
Textile industry body Cotton Textiles Export Promotion Council (Texprocil) has requested the Union government to extend benefits for garments exporters so that they can compete with players in countries with whom India has signed free trade agreements (FTA). R K Dalmia, Chairman of Texprocil feels, considering the infrastructural disabilities, cascading effect of un-rebated taxes, high cost of inputs and preferential benefits granted to competitors, the government has to play an important role by continuing the export benefits for some more time.
He further said that the emergence of mega trade agreements being promoted by United States and the European Union amongst themselves and other key trading partners like Korea, Vietnam and Japan poses fresh challenges to countries like India. It therefore, would be best if India takes an integrated rather than an ad-hoc approach while negotiating new FTA or re-negotiating old ones.
He had earlier asked the government to include cotton textiles under the three per cent interest subvention scheme, release of funds through TUF and recalibrating the product/country matrix under the newly introduced Merchandise Exports from India Scheme (MEIS).
Though overall exports of cotton textiles declined by 0.1 per cent in FY 2014-15, shipment of cotton fabrics and made-ups registered growths of 11 per cent and 5 per cent to $2.44 billion and $5.05 billion respectively.
www.texprocil.org
A Special Skill Development Center was recently introduced in the remote village of Chogawan besides engaging 52 Ludhiana-based clothing units to ensure direct placement of girls and boys belonging to border areas, under a Skill Development mission. The Amritsar administration in association with North India Technical Consultancy Organisation (NITCON), under Border Area Skill Development Program has set a target of providing skilled force of 1,932 youngsters to clothing ventures in Ludhiana. All of them will get confirmed placements in industries after completion of their skill development courses.
Veer Singh Lopoke, Chairman, District Planning Committee inaugurated the state of art Advance Cutting and Tailoring Center at Chogawan village. He was accompanied by Deputy Commissioner Ravi Bhagat. Singh stated that the fixed target will be accomplished by March 2016. Bhagat, while giving details about the centre said that this was the of its kind centre in border areas of state that had Japanese machines. Nearly 52 Ludhiana-based clothing industrial units were to be provide direct placements to skilled trainees of this centre. There will be three-months skill development courses in advanced cutting and tailoring to cater to the needs of Ludhiana garment industries at the centre. He added that this initiative would give a fillip to economic growth of three border blocks of district: Chogawan, Ajnala and Attari.
