FW
Leaders of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) have urged the government to give tax or cash incentives as the wage of the workers would be raised.
The leaders claimed any increase in the workers’ wages on top of the amount suggested by the owners’ representative to the wage board would be a threat to the survival of the country’s readymade garment sector. BGMEA recently proposed Tk 6,360 as minimum wage. Labour rights groups are demanding Tk 16,000 as the minimum wage while workers’ representative to the wage board, Shamsunnahar Bhuiyan, a ruling party-backed labour leader, proposed Tk 12,020 as the minimum wage. BGMEA president Siddiqur Rahman will negotiate with the government to protect the interest of factory owners. He was apprehensive that the wage hike would increase cost of doing business.
Primark, in its recent trading update, has stated the brand would generate 5.5 per cent more sales than past year at constant currency 6 per cent at actual exchange rates), driven by increased selling space. But this will be offset by a 2 per cent decline in like-for-likes (LFL).
The company has stated the chain had performed well in the UK, where full-year sales are expected to be 6 per cent higher over last, and its share of clothing market has also increased significantly. The brand’s stores in Spain, Portugal and Italy also delivered strong sales growth in the year. LFL sales decreased due to a decline in northern Europe where the unseasonable weather during three periods this year led to difficult retail conditions. Despite this, sales in northern Europe were well ahead of last year driven by increased selling space.
The company’s operating margin during decline to 9.8 per cent, down from 10 per cent year-on-year, due to the adverse effect of the US dollar exchange rate on purchases. But margin in H2 will be “well ahead of the first half and last year, driven by the benefit of the weakening of the US dollar exchange rate on purchases and by better buying.”
Rights campaigners, women leaders and government officials in Bangladesh have demanded higher wages from overseas employers who wished to recruit skilled apparel workers from the nation. As per Bangladesh Overseas Employment Service Limited (BOESL), it was essential for overseas employers to double the wages of Bangladeshi garment workers as their wages had been increased in Bangladesh.
Over one lakh Bangladeshi apparel workers are employed abroad and 50per cent of them were sent by the country’s lone state owned recruiting agency BOESL. Workers employed in Jordan, Mauritius and Bahrain were paid lower wages, compelled to work overtime without any extra payments and were provided with unhealthy accommodations.
Karmojibi Nari, Director for Programme Sunzida Sultana believes that since garment workers were drawing better wages in Bangladesh, overseas employers should increase their wages by at least two times.
In Bangladesh, 67 green garment factories have already obtained LEED (Leadership in Energy and Environmental Design) certification from the US Green Building Council (USGBC) and over 300 more are waiting to be certified. The garment sector's strong green initiative was noticed in the survey of the Partnership for a Cleaner Textile (PaCT) of the International Finance Corporation. Local suppliers are also contributing by saving water, energy and environment.
Around 250 textile factories in Bangladesh have invested $39 million to save 21 billion liters of water a year. Currently, 1,700 factories run effluent treatment plants (ETPs) in their factories to save the environment. Although the factory managements of these units regularly report to the Department of Environment (DoE), they need to improve the performance of the ETPs. The DoE will start monitoring the operations of these ETPs online in 500 factories to obtain better results from the plants.
The value of Vietnam’s textile and garment exports rose 19.2 per cent in 2017 compared to 2016. However, the cost of logistics activities for textile and garment enterprises accounts for 9.1 per cent of total export turnover. Logistics costs in the country are six per cent higher than in Thailand, seven per cent more than in China, 12 per cent higher than in Malaysia and three times more than in Singapore.
Despite reasonable labor costs, Vietnam’s competitiveness has been affected by transport costs, surcharges at seaports, and limited seaport infrastructure. Regulations on fees and charges for logistics services are high, making transport costs also relatively high, accounting for between 30 and 40 per cent of the cost of products, compared to some 15 per cent in other countries.
In addition, the surcharges of shipping lines also contribute to the cost of logistics operations in the country. Expanded costs for logistics have significantly affected the garment and textile industry, which employs a large number of labourers and is hugely dependent on input importation, which results in low added value.
To address these challenges, many firms have applied technology to better manage warehousing and optimise supply chains. One of the most commonly used technologies includes backing up bills and contracts, and automatically transferring documents between firms. Logistics enterprises are working to improve their competitiveness, and consider cooperating in transport services to reduce costs for other enterprises.
Japan and China, in recent months, have undertaken strategic measures to improve their trade relations in response to trade war measures against both countries by the Trump administration. Both governments are exploring closer economic relations to offset Washington’s trade war measures.
Japan, as the third largest economy in the world, is turning to China to offset the negative impact of the more openly predatory US policy. With the economies in the region closely linked, the US tariffs on Chinese goods will also indirectly impact Japan. However, Tokyo will use whatever foothold it can gain through this apparent thaw in relations with Beijing to ensure its imperialist interests are met. Rather than working as a junior partner of the US, the Abe government is increasingly pursuing a more independent foreign policy and remilitarizing so it can back it through force of arms if necessary.
For China, opening new markets would mitigate some of the effects of US tariffs already imposed on $50 billion worth of goods and another $200 billion that Trump is now proceeding with. To mend relations with Tokyo, Beijing has toned down its anti-Japanese chauvinism and also eased tensions over its territorial dispute.
The textile and apparel industry in Indonesia wants downstream products to be protected from the onslaught of imports. Other aspects that need improvement include electricity tariffs, ease of distribution and quality of human resources. For Indonesia, trade agreements with partner countries can increase both export value and market share.
The Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) which expected to be ratified in November 2018 could have an impact on increasing the market share of apparel exports to Australia. Indonesia is also looking to complete trade agreements with key partners such as the United States and the European Union, which are the main destinations for Indonesia’s textile exports. With such agreements in place Indonesia expects its exports of textile and textile products to increase three-fold.
The cooperation agreement with Japan has helped increase Indonesia’s exports. Till now, lack of market access has been a constraint for the textile industry. Meanwhile, textile products from neighboring countries, such as Vietnam, can enter with a zero per cent import duty. At present, the market share of new domestic textile products is around 1.8 per cent while in Indonesia the textile industry has been integrated from upstream to downstream so that the potential for development is still large.
The Silk Mark Organisation of India (SMOI) recently organised the Silk Mark Expo in Guwahati. The five day event, sponsored by Central Silk Board, Ministry of Textiles, was held at the Northern Eastern Development Finance Corporation. (NEDFi) House.
The event was attended by 44 Silk Mark members and authorised users from across the country who showcased their ‘Vanya’ silk products such as muga, eri, tussar, etc. The Assam government announced the setting up of a yarn bank in the Sualkuchi at the event. The bank will make raw material available at the market price with a subsidy of 20 per cent. This initiative will benefit the local weavers who will be able to buy the raw material without paying any extra cost to the traders. Also, the raw material will be available locally, further eliminating the transportation cost.
A collaborative research between scientists in Kerala, and Florida has utilised supercritical carbon dioxide as a carrier to size and resize cotton. They have identified supercritical carbon dioxide attractive chemistries such as sucrose octaacetate, glucose pentaacetate and polyethylene glycol that can be applied to textiles via supercritical carbon dioxide at a pressure of about 90 bars, making the process cost-effective.
Researchers claim the process is cost-effective as it avoids other costlier functional chemistries and is environmentally friendly. Sucrose octaacetate in supercritical carbon dioxide system provided good results for cotton and polyester and the chemical is inexpensive as it is an agricultural product.
Green technologies such as supercritical fluids and plasma have been getting serious attention these days. Consumers prefer sustainable processes and clothing. Stating a survey, Melissa Bastos of Cary-based Cotton Incorporated stated almost 63 per cent of consumers globally invest time and effort into finding sustainable clothing.
The textile division of All Pakistan Textile Mills Association (APTMA) has proposed to Prime Minister Imran Khan to reduce electricity and gas prices. The association has proposed the withdrawal of tariff rationalisation surcharge currently at Rs 3.10/KWh and financial surcharge at Rs 0.48/KWh. As per the textile division's presentation, RLNG depends on international prices and are currently at Rs 1,600 mmbtu while the system gas available in Sindh and KPK are at Rs 488-Rs 600 per mmbtu. Disparity in gas price vis-à-vis system gas and RLNG is one of the major issues.
APTMA hoped the new government will take decisions in the interest of industrial sector after incorporating the feedback from the respective sectors. The finance ministry has assured APTMA of its full support to uplift this export-oriented sector on the condition that the sector will fulfill its obligations for increasing exports bringing in much needed foreign exchange and will not in any case be helpful to anyone involved in tax evasion.
