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A year after the Rana Plaza disaster in Bangladesh and the Accord on Fire and Building Safety has appealed to retailers and clothing brands to donate more to the fund in order to complete its factory inspections. Europe-based Accord, an organisation set up in the wake of the Rana Plaza tragedy in Dhaka to ensure higher factory standards through a legally binding agreement, this week published its first annual report.
From an initial 25 brand signatories at its inception, the Accord now has around 180 signatories, representing over 1,500 garment factories and two million workers. Signatories include clothing giants such as H&M, Benetton, Adidas, and Marks & Spencer. At present, each signatory contributes funding in proportion to the annual volume of its garment production in Bangladesh, relative to those of the other signatory companies. This is up to a maximum contribution of 5,00,000 dollars per year, averaged over the five years of the Accord.
Accord’s steering committee may also seek financial contributions from governmental and other donors. As of the end of June, the financial contributions generated from the increase in members have allowed the Accord to carry out 800 factory inspections. However, now the amount will now be needed to complete inspections on the remaining 700 factories.
Independent pilot inspections of a first batch of ten factories began in November last year, and since February, inspection teams have been in the field examining around 50 factories per week, the report revealed. To date, the organisation has disclosed inspection reports and corrective action plans (CAPs) of 60 factories out of 100 agreed.
www.bangladeshaccord.com
East African countries are aggressively courting foreign investors to revive their textile and apparel industries. Uganda for one is engaging widely with foreign investors through diplomacy. The US is a critical market for Uganda.
While Uganda faces several infrastructural and operational challenges, this landlocked country has a plentiful labor supply and a growing middle class. Also, Uganda is working to lower the cost of doing business in the country, aiming to leverage export market benefits created by the US African Growth and Opportunity Act and the US- East African Community Trade and Investment Framework Agreement.
Kenya has allotted land in its capital Nairobi for an upcoming textile manufacturing hub. With its steady overall growth (4.6 per cent in 2013 and 4.7 per cent in 2012), Kenya is offering opportunities in apparel exports. It’s giving investors ten years’ tax free to recoup their investment. Meanwhile Kenya continues to court Chinese investment. In May, Kenya signed 15 bilateral project and political initiative agreements with China, including investments in the key Nairobi to Mombasa railway line.
Kenya, Mauritius and Ethiopia are currently showing the most growth in terms of sourcing by US companies. While African suppliers are sometimes slower in delivery times than other regions, they offer good quality products, and effectively anticipate which products will be in demand by western buyers.
Textile exports from Pakistan have increases by 5.30 per cent during the fiscal year 2013-14 compared to the corresponding period of last year. The overall textile exports from the country during July-June 2013-14 stood at $13.738 billion compared to the exports of $13.047 billion in July-June 2012-13, according to the latest data of Pakistan Bureau of Statistics (PBS).
Textile products that contributed in the positive growth of trade included raw cotton, exports of which increased by 33.27 percent by going up from $153.929 million last year to $205.139 million during the fiscal year 2013-14. Similarly, the exports of cotton cloth increased by 3.11 per cent from $2,689.832 million to $2,773.564 million whereas the exports of yarn (other than cotton yarn) increased by 12.82 per cent by going up from $38.476 million to $43.409 million.
According to the PBS data, the exports of knitwear increased from $2,042.958 million to $2,258.054 million, an increase of 10.53 per cent whereas the exports of bed wear increased from $1,785.417 million to $2,258.054 million, an increase of 19.78 per cent. Readymade garments also witnessed 8.67 per cent in exports and the exports of made up articles (excluding towels) increased by 11.41 per cent.
On the other hand, the products that witnessed negative growth in trade included cotton yarn, exports of which decreased by 11.65 per cent. The exports of cotton yarn decreased from$ 2,252.952 million to $1,990.529 million. The exports of cotton (carded or combed) also decreased by 53.30 per cent by going down from $13.632 million to $6.366 million.
The exports of art, silk and synthetic textile also decreased by 5.47 percent, from $405.683 million to $383.476 million, the PBS data revealed. Exports of all other textile materials increased by 23.24 per cent during the period under review surging from $379.394 million to $467.552 million. The country’s trade deficit narrowed by 2.48 per cent during the fiscal year 2013-14 as exports expanded by 2.75 per cent while imports witnessing slight increase of 0.36 per cent as compared to the same period of last year.
In the first half of the 2014, Vietnam's exports of apparel products accounted for 13.2 per cent of the total export revenue earned during the period and apparel exports increased by 19.8 per cent as compared to last year. The US was the largest market for Vietnam’s garments in the six-month period. The US market grew by 15.8 per cent year-on-year and accounted for 48.7 per cent of Vietnam’s total market share for garments.
However, the Vietnamese garment industry is facing several internal problems such as being too dependent on imported fabrics, focusing on cut, make and trim jobs, which create low wages for local workers. Last year, Vietnam’s fabric and garment exports grew by 18.9 per cent year-on-year. For the first five months of the year, Vietnam’s exports of yarn rose by 18 per cent. China had the biggest share in this followed by Turkey and South Korea.
For the five-month period Vietnam’s cotton imports soared by 33.2 per cent. Yarn imports grew by 9.2 per cent year-on-year. Fabric imports also climbed 15.7 per cent. Vietnam is exploring the possibility of importing yarn and fabric from countries like India, Indonesia, Malaysia, South Korea and Thailand, to reduce dependence on China, the main supplier of these materials to Vietnam.
Garments sold in German shops may have to introduce a form of social labeling to re-assure consumers that minimum labor conditions have been met by suppliers. Clothes tagged with the special label will come from conditions where seamstresses involved in production can live from their work and ecological standards were complied with. The aim is to develop a fair trade textile label covering the entire supply chain from the cotton field to the hanger.
German NGOs and businesses have attacked the social labeling plans. Apparel producers say the approach is unrealistic. They say it is difficult to completely control such a complex supply chain since it is almost impossible to monitor every step of the production process.
Their main argument is that they already have to carry a large number of labels and they are not sure what a future label could really bring that is positive. Previous initiatives to improve human rights standards in the supply chain were faced with the supplier companies' failure to comply with required social standards.
German authorities say labeling is necessary since unbelievable conditions often prevail in countries where the clothes are produced, with workers forced to toil for long hours and for subsistence wages.
The Alliance has identified 16 major challenges for carrying out sustainable reforms Bangladesh's readymade garment (RMG) industry. These include inadequate government capacity, unauthorised subcontracting business, limited presence and acceptance of trade unions and lack of modern safety equipment.
Other challenges include factory managers' poor knowledge about modern safety equipment and practices, understaffed government agencies responsible for building and fire safety, inconsistency in enforcement of law, required compliance, ambiguity between government agencies over enforcement and building approvals and unavailability of internationally certified but costly fire and electrical equipment, according to the first annual report published on its official website.
The Alliance report also revealed that 50 per cent of the surveyed 587 factories are now carrying out remedial recommendations by experts while 10 factories were fully or partially closed. The challenges related to inspections that the North American group of apparel companies, retailers and brands is continuing to address are limited pool of locally-based, qualified and experienced engineers familiar with international safety standards, lack of transparency and price pressure and limited production capacity within individual factories. Others are unauthorised sub-contracting and lack of retailers' sufficient leverage within individual factories to drive change due to dispersed production.
International fire, electrical and life safety standards are still new in Bangladesh while culture of safety is not well established here and literacy skills within the workers are limited, it noted. The other challenges identified related to workers empowerment are weak worker representatives' structure like trade union and worker participation committee and workers' intimidation or harassment in exercising their rights for freedom of association.
www.bangladeshworkersafety.org
Taiwan's textile exports for the first six months of 2014 fell slightly year-on-year in reflection of falling product prices. Exports of Taiwan-made textile products, including ready-to-wear garments and upstream fabrics, totaled $5.81 billion in the six-month period, down 0.3 per cent from a year earlier.
The fall resulted from a slight downtrend in unit product prices, in particular the price of artificial fibers. Taiwan's textile imports, meanwhile, rose by an annual 2.9 per cent in the first half of the year. The local textile sector registered a trade surplus of $4.22 billion in the first half, down 1.4 per cent from a year earlier. In June alone, Taiwan's textile exports totaled $982 million, down 1.4 per cent from a year earlier, while imports rose by an annual 11 per cent to $261 million.
Last month, the local textile sector’s trade surplus fell 5.3 per cent year-on-year. Earlier textile and apparel industry in Taiwan relied on imported raw materials for its production and exported most of the finished product overseas. As the industry evolved, it began utilizing petrochemical-derived materials and importing raw cotton yarn and manmade fiber staple yarn. In time, it became vertically integrated throughout the supply chain, from man-made fiber manufacturing to yarn spinning to weaving and knitting to dyeing and finishing.
Ghana is expected to work closely with China as part of a strategy to combat the import of pirated Ghanaian textiles from China.This comes after several calls on governments to tackle the widespread pirating of Ghanaian textile designs in China at a bilateral level.
A 17-member anti-textile piracy task force has been constituted to flush out traders involved in the illicit business. Some compensation would be paid to informants that help in the arrest of criminals. Informants who give leads leading to the arrest of big fishes engaged in the pirating of local textile designs would be rewarded.
A taskforce has been formed. It will conduct a nationwide sensitization exercise to educate market women on the dangers involved in dealing in pirated textiles. Ghanaian textile firms are struggling to stay ahead as cheap Chinese imitations of traditional African designs are flooding their market and are being sold at vastly-reduced rates.
This is forcing designers in Ghana to work doubly hard to stay ahead. They go to a market and see the designs they have made have been copied. Just one quarter of Ghanaian demand for African prints is met by locally produced textiles - a situation that is attributed to smuggled Chinese imitations. Sales have fallen by between 50 and 75 per cent as customers buy Chinese copies of locally produced designs.
Egypt is trying to encourage public spinners and exporters to purchase Egyptian cotton instead of imported cotton. They will be encouraged by subsidies. Farmers will also be presented subsidized seeds and fertilizers.
About 350 million EGP of the financial allocation will be directed to subsidize the public and private sectors. The remaining 150 million EGP will be directed to supporting re-running the bankrupt spinners, and revitalizing the sector as a whole. This new decision is expected to revitalize the sector as a whole, comprising farmers, cotton workers, merchants, and exporters, increase Egypt’s revenues of cotton, and re-run the halted factories.
Egyptian cotton was shunned because of its high prices. The price of Egyptian cotton was 1,300 EGP per kantar while imported cotton was 750 EGP per kantar. Egyptian cotton is extra long staple. These plants were introduced to Egypt in the nineteenth century and developed as a cash crop. The plant is tropical and grows as a small, bushy tree requiring high humidity and rainfall. It contains the chemical gossypol, reducing its susceptibility to insect and fungal damage.
Cotton from Egyptian fibers is more breathable and becomes softer over time with use. It produces less lint and will not pill. This high quality fiber is long and narrower than other cottons, allowing thread counts of up to 1,000 per sq. inch. This provides a lighter weight and extremely strong, long-lasting durability.
An advisory committee of the Ministry of Textiles and jute has urged the Bangladesh Bank (BB) to ensure fresh working capital for private jute millers, keeping their outstanding loans along with five years’ interest in a blocked account. The advisory committee also urged banks to set the cut-off date on June 30, 2014, instead of December 31, 2013, in case of blocked accounts.
The committee took the decision in a bid to salvage the ailing jute industry facing liquidity crisis that put most of the mills in dire straits. The situation has become aggravated as export earnings from jute and jute goods have fallen due to decline in overseas demand. To overcome the crisis, the meeting highlighted the urgency for refinancing jute millers and urged the BB to introduce the block account facilities to millers to keep the sector alive.
Millers have urged the government to provide blocked account facilities to private jute mills and allow fresh loans. The finance ministry also advised the BB to provide fresh loans to private jute millers. It directed the central bank to keep their outstanding loans along with their five years’ interest, taken until June 30, 2011, in a blocked account at 8.0 per cent interest with10 years’ re-payment facilities.
