FW
Turkey’s exports declined by 10.5 per cent in November to $11.44 billion year on year owing to currency fluctuations and geopolitical risks, according to temporary data revealed by the Exporters’ Assembly of Turkey (TİM) on December 1, 2015.
The country’s exports declined by 8.6 per cent to around $132 billion in the first 11 months of the year compared to the same period of the previous year, according to the TİM data. Turkey’s 12-month exports saw a decrease of around 7.8 per cent to $145.2 billion, according to a statement from the association. The largest amount of exports was made by the automotive sector in November at around $1.92 billion in November, followed by the ready-made clothing sector and the chemical materials sector, both of which, however, saw a 6.3 per cent decrease and 12.8 per cent decrease, respectively, in November compared to the same month of 2014.
While its exports to Africa increased by 0.7 per cent, its exports to the European Union regressed by 0.9 per cent, to North America by 11.2 per cent and to the Middle East by 19 per cent. Exports to Russia declined by 38 per cent to $3.5 billion in the first 11 months of the year compared to the same period of 2014.
www.tim.org.tr
The government of India has issued a draft notification to control the massive pollution caused by the textile industry. It has directed the industry players to adhere to the 'Zero Liquid Discharge' (ZLD) norms which make it mandatory for them to recycle all effluents released by the factories. However, experts argue that the cost involved in implementing the method will lead to small players shuttering their units and sludge dumped by the factories making an harmful impact on the environment defeating the whole purpose.
According to the draft notification, all textile units - dyers, cotton or wool processors, integrated factories - that generate over 25 kilo litre effluents daily must install ZLD effluent treatment plants. After the notification is approved, the units will have 30 months to set up the treatment plants. They won't be allowed to operate if they fail to comply. The units that already have effluent treatment plants will be required to make them ZLD compliant.
Experts point out that while the government is taking this measure to clean the mess created by textile factories, even though the effluents are treated in a ZLD plant, sludge remains, which will be dumped, which cannot be released into the ocean since it will be too concentrated. As Rajesh Gajra, an environmental consultant with expertise in setting up effluent treatment plants exclaims that the big question the government will face of handling dumping of this sludge when it's struggling with municipal solid waste management.
Executive Director (Economic Division) of Taipei Economic and Cultural Centre in India Guann-Jyh Lee recently visited the two-day Taiwan Textile Fair organised by Taiwan Textile Federation, in association with the Tirupur Exporters Association (TEA), and the Confederation of Indian Textile Industry (CITI). While speaking to the media during the event, he said that Taiwan has succeeded in the production of recycled PET bottle textiles.
Bottles collected from different sources are first crushed and then converted into staple fibres for spinning, or into filament yarns for weaving, and these yarns result in a ready-to-wear product. According to the Environmental Protection Administration, 90,000 tonnes of PET bottles are reclaimed in Taiwan every year, which are equivalent to 4.5 billion drinking water bottles. The production of recycled PET bottle textiles in Taiwan is easily achieved through reclamation scheme. Consumers are encouraged to recollect used bottles with over 67,000 religious and environmental volunteers contributing to the cause of reclaiming resources from waste.
According to Lee, because of a complete and comprehensive production system, Taiwan has achieved the status as the kingdom of polyester textiles. The production and application of recycled PET bottle polyester fibers are optimised with the upstream spinning technologies for functionality, micronisation and compound effects, and the downstream finishing technologies of weaving, dyeing, coating and lamination.
Taiwan's position as the most reliable source for functional and ecological textiles is supported by the fact that various international sporting event such as 2014 FIFA World Cup Brazil, had many teams wearing jerseys made from recycled PET bottle textiles developed by Taiwanese textile companies.
www.textiles.org.tw
The readymade garment factory owners in Bangladesh have expressed their displeasure over the delay in approving detailed engineering assessment (DEA) reports of the RMG factories by Accord and Alliance – two platform active in the country under European Union and North American brands and retailers.
According to the factory owners, approval of the DEA reports is being put on hold by these platforms since factory assessments were not carried out by the firms nominated by them. Factory owners have now raised concerns over the intention of officials belonging to Alliance for Bangladesh Worker Safety and Accord on Fire and Building Safety in Bangladesh.
As of August 31, 2015, Accord, a platform of EU retailers has received DEA reports from 610 factories but has approved only 70 out of them. Alliance, on the other hand, a consortium of North American buyers and brands had asked its 176 supplier factories to conduct DEA. Despite out of 176 factories, 115 submitting the reports to Alliance, only 27 have been approved.
RMG factory owners have said that unnecessary delay in approving DEA reports is impacting the remediation works as well as the production at their factories. According to them, those factories that are not conducting DEA with the firms nominated by engineers of Accord and Alliance are facing the delay and issues. Some are even asked to conduct fresh DEA.
Contrary to this, according to Alliance, Some 226 factories were asked to conduct DEA in line with the Corrective Action Plan (CAP), 147 submitted their reports, and 39 have been approved till date. Some players, according to them, delay in submitting the report fearing poor findings and then face scrutiny by the committee.
A report by Accord indicates that till August, around 610 DEA reports by factories and brands were submitted for the Accord's approval but only 70 reports have been approved so far by the Chief Safety Inspector (CSI. Acknowledging the DEA review a slow process, the report says that the Accord's primary focus has been on red and red/amber factories, and these do not experience major delays in review. DEA review of factories of less concern takes longer. The Accord also hired six new structural engineers recently to expedite the approval process.
Bangladeshaccord.org
www.bangladeshworkersafety.org
With heavy-rainfall and floods hitting the domestic cotton crop, Pakistan has turned its attention to India to fulfil the domestic demand. It is buying more cotton than expected from the country, which has boosted cotton exports from India that has been dealing with the issue of rising cotton stockpiles.
After China rolled back its cotton stockpiling policy and began releasing stocked cotton for its own consumption, India’s cotton exports were hit hard and farmers have been struggling to get rid of the piling inventories. However, recently rising demand from Pakistan has helped in boosting cotton prices in India to above a state-fixed support price in most regions, which has also reduced the pressure on the government.
Earlier China was a major importer with almost 50 per cent of cotton exports from India to the country, however now Pakistan has emerged as the lead importer with half of the two million bales exported this marketing year that started on October 1, 2015 going to the country.
Industry experts expect the total cotton imports by Pakistan to rise more than triple this marketing year. Pakistan's overall cotton imports are increasing to at least four million bales in the year that started on August 1, 2015, from 1.2 million bales a year ago.
According to the Investment Coordinating Board (BKPM), it has been assigned the task of overseeing investments from China in Indonesia’s textile sector. China has expressed its desire to invest $ 1.9 billion in the country.
One on one meetings were held between parties from both these countries in co-operation with the Consulate General of Indonesia in Shanghai last week. The rising interest in the country’s textile segment, BKPM feels, indicates that Indonesia remains an attractive country for investments in labour-intensive sectors such as textiles and textile products (TPT).
BKPM sights Vietnam as its main competitor. It says that as per the data released by the Financial Times, between September 2010 to September 2015 period, five projects were initiated by China worth $470 million in Vietnam, which is a major competition to Indonesia as far as attracting foreign investments are concerned.
www.bkpm.go.id
According to the latest estimates by agencies like Cotton Advisory Board (CAB) indicate that cotton output in the country will be 25 lakh bales less than the previous year. The latest estimate received by Maharashtra Cotton Growers' Federation shows that the national production is expected to be at 350 lakh bales.
In Maharashtra, projections have been reduced to 60-65 lakh bales from over 75 lakh bales earlier from the national and state production at 375 lakh and 80 lakh bales respectively reported last year.
However, national research agency Central Institute of Cotton Research (CICR) anticipates the output to be at least equal to the last year. From the regional perspective, both Vidarbha and Marathwada areas, prime cotton growing regions faced a severe drought this year that impacted the cotton produce. And while the production is expected to be higher in Vidarbha compared to Marathwada, traders in Marathwada are offering around Rs 4,200 a quintal, as against Rs 4,150 in Vidarbha because of the quality.
The situation is slightly better than the last year in Yavatmal, known for suicides by cotton farmers. But as compared to the general average yield, even this year's harvest is too less. Farmers may reap 7 to 8 quintals a hectare, as compared to an average of 12 quintals.
Cotcorp.gov.in
Maharashtra plans to develop Vidarbha district as a textile hub. The 2016-17 Budget will have a special allocation to promote cotton based industries. The detailed plan includes integrating the three nodal departments of textile, finance and agriculture.
The textile sector will be promoted through a public-private-partnership. Vidarbha is a major cotton growing region of India and among the biggest. It contributes 30 per cent of the crop. As part of the farm-to-fashion drive, the state government will spend Rs 2,000 crores in the region. A value added chain will integrate farmers with the textile industry.
All cotton related small and medium scale industries would be promoted in the region including cotton spinning mills in Akola, Buldhana, Yavatmal, Washim. At Nandgaon, 500 hectares of land have been approved for the textile hub which has received proposal from eight players. Work has already started.
Maharashtra has been pushing hard to seek higher minimum support price from the Center for cotton. The Center meanwhile has fixed MSP at Rs 4,100 per quintal. The process of cotton procurement is on with outlets including Nagpur, Aurangabad. The target of 100 lakh quintals is higher than last season’s 27 lakh quintals.
Santex Rimar has bought SMIT Textile, world’s leading manufacturers of looms and weaving machines. Santex is a partner for its customers throughout their production processes, from loom to finished natural and technical textiles. The Santex Rimar group is a specialist and technology partner for plant and equipment for finishing of textiles and for manufacturing high grade technical textiles.
SMIT Textile is one of world’s leading manufacturers of weaving machines, established in 1938. It is renowned for high standard levels of innovation, productivity and versatility, ensuring competitiveness among a large variety of applications, from garments fabrics to home textiles, terry cloths and technical fabrics.
With this synergy between SMIT Textile and Santex Rimar, customers can rely on one integrated technology provider for all production processes, a global service network, high quality products, a partner with a profile financially sound and deep technological heritage and know-how.
With the support of Santex Rimar group, SMIT Textile will be able to restart producing and supplying customers worldwide. Santex Rimar is present in various countries with four factories and more than 10,000 customers throughout the world. Due to the presence of the group’s local operations in China and in India, SMIT Textile will immediately be closer to customers all over Asia, ready to fulfil their needs on site on time.
www.santex-group.com/
FDI boosts economy
Goel and Hong Phuc feel, investments will not only come from TPP participant countries, such as the US and Japan where booming garment and shoe industries are poised to benefit from the elimination of tariffs, but from any country whose manufacturers are seeking easier and more secure access to some of the world’s most exciting consumer markets.
However, keeping in mind the favourable prospects for textile and garment industry, macro-economic indicators, pose fair warning to export dependent economies such as Vietnam. This is because the TPP and other future free trade agreements (FTAs) bring opportunities to Vietnam for increasing production and export, they will also create challenges that need to be tackled to secure future economic prosperity.
The past decade saw Vietnamese GDP grow at 6 per cent plus CAGR. The conducive economic environment has helped Vietnam grow its economy from $57 billion in 2006 to $187 billion in 2014. Investors are bullish about this growth and have pumped in $4 billion into the economy annually between 2001 and 2015. The textile industry is a primary growth engine in a manufacturing-driven economy contributing 15 per cent to the overall GDP, 18 per cent to overall exports, and 4 per cent to the global textile industry.
Textile industry’s growth drivers
The duo feel Vietnam’s textile industry, being an important driver of the economy, necessitates a focus in strategy formulation to maintain robust and sustainable performance in the evolving economic scenario. The primary driver for growth of Vietnamese textile industry came about with the completion of Multi Fibre Agreement (MFA) in 2005, which resulted in the abolition of quotas for first-world exports. The abundance of orders from the developed world resulted in a spurt in manufacturing with a mushrooming of small to medium players across these countries with turnover between $50 million to $200 million per annum. With Vietnam’s share of the global textile trade at 4 per cent, and being one of the top exporters of textiles and garments to the US, there is still a lot of scope in the short- to medium-term for accommodating more companies, or for the existing ones to add significantly to their current volume and revenue.
The duo feel FTAs being signed with the Eurasian Customs Union, and South Korea, as well as the TPP (which is estimated to increase exports to the US from $9.8 billion in 2014 to $30 billion in 2020) will certainly provide this impulse. However, while the macro situation seemingly assures sustained topline growth potential, the challenge of comparative cost inefficiencies will be even more significant with general price reductions by competing countries. Statistics show that while trade has expanded, the prices from exporting nations have actually reduced. The global price reduction trends put immediate pressure on the suppliers.
Investment in technology to stay competitive
It is imperative for the Vietnamese textile industry to look deeply into its operating models and tackle possible cost disadvantages to remain competitive globally. Studies have shown that once the TPP comes into effect the new trade relationships would create an additional six million jobs in Vietnam’s textile and garment industry. However, it will also increase the labour wage by 12 to 15 per cent. As a consequence, Vietnam needs to invest in techniques of modern floor management and industrial engineering practices to further enforce the advantage. Industrial engineering, lean manufacturing practices – especially in the cut and make departments – can help the organisations increase labour productivity substantially.
Supply lead time, according to the duo, is the other major differentiator: Players having control on upstream activities would be the first choice for customers sourcing in Vietnam. Gaining control can be done either by backward integration or putting appropriate demand management, planning, and procurement processes in place. For Vietnam, a key aspect of the infrastructure, apart from the plant and machinery, is the logistics infrastructure. The current state of Vietnam’s logistics infrastructure is sub-optimal, leading to higher procurement and delivery lead times with the sourcing to free on board shipping point) time often as high as 80 days. Players in other countries are operating with lead times of between 40-50 days. The situation can be remedied through the development of local sourcing options, which can cut the sourcing time of 20 days considerably.
www.kpmg.com
