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Amity School of Fashion Technology (ASFT) organised an industry interaction to welcome the students of 2015 batch. As a part of industry interaction, a large number of expert speakers from reputed fashion retail/brand companies, apparel export organisations as well as fashion communication & fashion designing experts visited the campus to address the new batch of under graduate and post graduate students. The topic covered was: ‘Expectations of the Fashion Industry from Young Professionals’.
The distinguished speakers included Roopak Vasishtha, CEO and Managing Director, Apparel Made-Ups & Home Furnishing Sector Skill Council; Ashvinder Singh, Managing Director, Uni Style Image; Ashok Raman, Vice President- Marketing, Shahi Exports; Stuti Jalan, MD, Crosshairs Communication; Shalini Ahuja, Accessory Designer, Shalini Arts and Nida Mahmood, Fashion Designer.
Pradeep Joshi, Director General, Amity Directorate of Applied Arts, Fine Arts, Performing Arts & Visual Arts welcomed the experts and requested industry veterans to guide the students by sharing their invaluable experiences. He also emphasised the need for greater industry-academic partnership thereby asking for continuous support and guidance from industry.
The drive to maintain set standards of safety for workers in readymade garment (RMG) factories, undertaken by International Labour Organisation (ILO) and the government in the aftermath of Rana Plaza building collapse, will continue for another three months. More than 300 units are yet to be inspected. The safety campaign, which was started in February, last year, had December 2014 as its deadline, which due to incompletion of task was extended to July 31. Again in the light of the same problem, it was extended to another three months.
Shedding light on the matter, Bangladesh labour secretary Mikail Shiper said, the deadline extension has been due to factory-owners’ demand for more time to complete fire, electricity and other safety parameters. They have time now until October 31 to get the work done at their premises.
He also stated that they had shortlisted 13 engineering firms for the purpose of assessment, and seeing that only two were in the job of inspection now, they have allowed factory owners to choose any listed firm on their own for this purpose. Questions were being raised by factory owners over the activities of field resource, wherein field resources people alleged to have been involved in provoking workers outside of the factories.
Far East Knitting and Dyeing Industries is a leading composite textile company in Bangladesh, with integrated, knitting, high end dyeing, finishing (tubular and open width), and state of the art printing, pigment dyeing and garment washing. The company supplies finished goods to renowned apparel brands Walmart, Primark, New Look and Bershka. Its major products are knitwear such as T-shirts, tank tops and vests and jackets.
The production capacity of finished garments is approximately 1.5 million pieces per month in basic T-shirts. Far East Knitting has floated 25 million ordinary shares. Of the total shares, sponsors or directors owned most of the shares, 78.45 per cent, the public held 19.39 per cent while institutions owned only 2.15 per cent shares. The company is now planning to expand and increase production capacity of finished garments by approximately one million pieces per month in basic T-shirts.
Far East expects its exports will double after completion of the new project. The project is expected to be completed by March 2016. The company has 1,400 sewing machines. The machinery include a variety of automatic and manual machines (plane, overlock, flat-bed, cylinder bed, two needle etc.) The daily sewing capacity on an average is 50,000 to 60,000 pieces a day for basic items and about 45,000 pieces a day for more sophisticated garments.
www.fareastknit.com/
Indonesia's garment and textiles industry has seen good sales growth as consumers loosen their purse strings. Moreover, the country is doing well, partly due to weaker rupiah. However, the sector is facing major challenges amidst rising competition in the ASEAN region. Indonesia needs to strengthen capital, technology and know-how, to help meet quality and quantity of goods in the growing apparel industry. This is a challenge to attain and also an opportunity for investors.
Upstream investment in Indonesia’s textile industry is because of the healthy downstream business as garment manufacturers capitalise on rising domestic and foreign demand. Indonesian government is set to increase the value of exported textiles and garments to $75 billion by 2030, contributing 5 per cent to global exports.
Upstream business hurdles
Indonesia leads in textile manufacturing due to strong upstream and downstream business. Major local garment makers want to take advantage of this and have also upped their capital to acquire assets, which would help them streamline their supply chains. The upstream side though, has been struggling to keep up. As per Indonesian Synthetic Fiber Producers Association (APSyFI), imports of fibre doubled to around 600,000 tonnes from 300,000 in 2008. As downstream businesses keep sourcing their input materials from abroad, the domestic upstream industry has been failing to benefit from rising consumer expenditure.
The output of upstream textile products has grown through the years, but costs have gone up faster, thus straining businesses. The imperfect condition of upstream business also reflects in the industrial production index for the textile industry. This has been declining since 2010, which is in contrast to most other industries. Large and medium-sized textile businesses have declined in numbers. Trade data shows that the country’s upstream business is increasingly becoming dependent on imports, while exports grew only moderately over the past five years.
Imports of both yarn and fabrics have increased and in manmade fibre products, imports of yarn and woven fabric have outpaced exports over the past five years. Also, the imports of manmade filaments and staple fibres have grown rapidly, as the garment industry demand increased. Thus, Indonesia's upstream textile industry is struggling to ward off foreign competition.
Factors affecting upstream business
Lack of competitiveness in Indonesia’s textile industry can be put down to several factors. The use of inefficient technology, underdeveloped transportation system, power infrastructure and rising energy costs are some of them. Labour, of course, is the garment producers’ biggest worry, but not as much for the capital intensive upstream business. Indonesia also falls behind in higher-value products where local producers are concerned.
Government incentives to help textile companies have been insufficient so far and even government-sponsored training programmes and industry clusters aimed at generating local know-how and fostering integration are not that successful. Besides, the upstream business lacks competitiveness. So, since government measure so hardly effect, hopes are pinned on the private sector and foreign investors. Exporters of spinning and weaving machinery, consulting and staff-training too have an opportunity here.
The International Cotton Association (ICA) and the Beijing Cotton Outlook Consulting, are jointly organising a three-day interactive training course to focus on the key areas of China’s international cotton trade and global cotton market. The programme is scheduled for September 21, 2015. There will be a series of training modules, conducted in Chinese by industry expert. The modulus would cover topics such as: Fundamental knowledge (world cotton market and import/export, major cotton export countries and their characteristics); major cotton export countries and their characteristics); trading rules (dispute resolution, international trading rules, arbitration agreements, arbitration procedures and arbitrator training); and trading issues (risk management, contract making, futures and options, cotton controlling and testing).
The program also includes a series of elements, presented by top experts. These include: Basics (world cotton market, import and export, the main cotton exporters and their characteristics); trade rules (to resolve disputes, international trade rules, the arbitration agreement, the arbitration proceedings and the arbitrators training); and trade issues (risk control, contract making, hedging, cotton inspection and testing).
This trade training programme is especially developed for the Chinese cotton industry, is conducted in Chinese and meant for all age groups from all sectors of the cotton industry. The three day program slated for September 21 to24 will be held at the Shenzhen Silver Lake Resort Hotel in Shenzhen, China.
The issue of compliance to safety rules in RMGs has taken centre stage in Bangladesh. This was visible in a recent meeting organised by the Centre for Policy Dialogue, involving union representatives, industry stakeholders and business leaders to brainstorm on compliance matters and how to maintain basic standards of safety in RMGs. The stakeholders are now keen to install safety equipments in their premises irrespective of cost and investment it may incur for them.
Experts feel safety issues may have taken precedence over others in Bangladesh, however, the matter is so crucial that it should not be ignored by other countries as well. This can help them to grow in manufacturing since the investment costs in countries other than Bangladesh is low, owing to factors such as developed infrastructure, lower interest rates, financial incentives and low cost of materials. The redressal of safety issues will give a competitive edge to companies involved in this segment and will assist everyone in the industry one way or another.
They also felt the whole exercise should not be a one sided affair and reforms should be the responsibility of both, the government and the industry.
Euromonitor International predicts the global market for Islamic fashion clothing is set to almost double its annual growth in the future. Natalia Gorzawski, Euromonitor International’s research analyst says that in the short-term it may be more beneficial for a manufacturer to invest in existing local brands or together with a Muslim fashion designer to create a new label.
Intensive research in the local markets and financial resources to develop a manufacturing process and a supply chain that can guarantee compliance with widely accepted halal standards is what a new brands needs to do, she said. Besides, Gorzawski explained that manufacturers would need to create an affordable clothing line that could meet the demand of the mass market and not just a small minority of upscale consumers if they want to exploit the full potential of this underserved consumer segment. She believes that these are the reasons why multinational companies still struggle to enter the market.
Gorzawski also feels that Islamic fashion has tremendous long-term potential. In 2013, the 57 countries that belong to the Organisation of Islamic Cooperation (OIC) accounted for 7 per cent of total value sales of apparel and footwear. Euromonitor International forecasts this figure to increase over 9 per cent by 2018.
According to Euromonitor’s estimates 7.9 per cent of the fashion market accounted for OIC countries in 2014, and this year their share will go up to 8.1 per cent. In 2016, it would go up to 8.4 per cent, in 2017 it would be 8.8 per cent, and in 2018 it would be 9.1 per cent.
Researchers in Australia have found a way to separate blends of cotton and polyester. This has been hailed as a major breakthrough for recycling textile and other waste.
A significant hurdle to recycling waste clothing and other textiles into their original fibers was that most of this material is composed of blended fibers - the most common being polyester and cotton blends. While it is easy to recycle cotton and polyester individually, it is not possible to mechanically separate the blends where the fibers are closely bonded together.
However the researchers have developed a simple process to separate polyester and cotton blends into their individual components using an ionic liquid or a salt in a liquid state.
Unlike harsh solvents which have previously been used to dissolve polyester, ionic liquids provide an environmentally friendly solvent to chemically separate polyester and cotton blends. Another benefit of using ionic liquids is the ease with which the polyester and cotton can be separated.
The ionic liquid selectively dissolves the cotton component, with the added advantage that the liquid can then be recycled and reused. This cotton can then be regenerated into various forms, such as spun into fibers or cast as cellulose films, like cellophane.
The cotton, textiles and garment manufacturing, once flourished in Nigeria and this industry was bulwark of manufacturing in the country and provided jobs for as many as a million Nigerians.
There were well over 150 vibrant mills operating at close to full capacity and the sector was second only to government as an employer of labor. Now less than 20 textile companies are operational.
However it is now almost completely dominated by imports from Asia. Textile products are imported from India, while imports from China, Indonesia and Taiwan are much higher.Nigerians have become used to imported goods to the detriment of locally-manufactured ones.
The Nigerian government now has called on its people to buy products made in Nigeria than relying on imports. The argument is that Nigeria has the raw material, the cotton and the labor to rebuild a profitable garment industry.
The output of the textiles, apparel and footwear segment in the first quarter of 2015 represented around 2.2 per cent of constant price GDP and 21.7 per cent of manufacturing.
There are various challenges facing the industry, including smuggling and the problem of power shortage. About 35 per cent of manufacturing costs are energy related.
Bangladesh saw remarkable growth in export of ready-made garments (RMG) to the United States between 2005-11. However, since then growth has slowed down for both knits and woven garments. Between 2011 and 2014, total apparel export rose by 7.3 per cent, which was a little more than the increase in the US apparel import demand. This means that Bangladesh had a marginal rise of 0.1 per cent in its share of the US market. A decrease in exports of Bangladesh’s single largest export destination shows that there is a downtrend in garment exports.
AGOA may cause disruptions
Now Bangladesh has tough competition from Africa which is fast emerging as a sourcing destination for Europe and the US. The African Growth and Opportunity Act (AGOA) was passed by the US over a decade ago, where it offers tangible incentives to African countries. This is to continue their efforts to open up their economies and build free markets. Due to this, it is highly possible that Bangladesh may lose its competitiveness in the export of garments to the US.
Bangladesh currently pays 15.62 per cent duty for its garment exports to the US, whereas Vietnam pays 8.38 per cent. If the TPP (Trans-Pacific Partnership) comes through, Vietnam’s garment items will enjoy duty-free access to the US. Since US tariffs treat Bangladesh like a developing country and not like a LDC (least developed countries), it has to pay more tariffs than France does for one-15th of the exports. The high tariff rates levied on Bangladeshi apparels hinders RMG industry’s capacity to partake in a bigger share of the US market.
Vietnam’s apparel exports too could rise faster than the current rate, eventually capturing a larger share of the US market. Vietnam has done well through 2005 to 2014 compared to Bangladesh. Also, there’s a gradual dip in the price of Bangladesh garments in the US.
Competition on the rise
In the last couple of years, the prices of apparel items dipped significantly in the international market. This is because global buyers controlled the market and pressurised suppliers to lower prices. The reduction of price is through 'monopsony', (monopsony is a market condition similar to monopoly, where a large buyer, not seller, controls a major portion of the market, and drives prices down). It is sometimes referred to as buyer's monopoly this helps big buyers to put pressure to reduce the prices of products because the number of suppliers is much higher than that of buyers.
Garment products from China and Vietnam too have risen and Vietnam has already entered into a partnership agreement with some other countries including the US. The US-led trade pact, Trans-Pacific Partnership (TPP) involves 12 countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam. This accounts for 40 per cent of the world GDP (gross domestic product) and Vietnam is the only garment-producing country that is included in the TPP.
Bangladesh though, has signed Trade and Investment Framework Agreement (TIFA),a bilateral agreement between the US and another country. TIFA 2005 stressed the need to ‘encourage and facilitate the exchange of goods and services and to secure favourable conditions for long-term development and diversification of trade between the two countries’. Next, there could be negotiation of a bilateral free trade agreement between Bangladesh and the US.
Bangladesh could take an interim measure, improve compliance, take an initiative to take protection of the Competition Act and coordination and close relations with the US lawmakers and the Washington administration, to get favourable terms of trade. It can even ask for protection from monopsony from small US buyers. This can lead to control over price and market by retailers. Moreover, it can follow the Chinese strategy of enhancing productivity and manufacturing high value-added products to increase its market share in the US.
