FW
Vietnam is looking for cooperation with Thailand in the areas of textiles, design and administration.
Vietnam has the skills and ability to become an apparel production hub for international buyers, but it lacks upstream and midstream channels. Thailand’s textile and garment industry, on the other hand, has an entire supply chain cycle from upstream to downstream, from yarn manufacturing to apparel manufacturing. It also includes fashion design.
Therefore, establishing a fully vertical integrated supply chain between Thailand and Vietnam will help the countries sustain their competitiveness.
Trade turnover between the two countries totaled ten billion dollars last year, a year-on-year increase of 12.5 per cent.
Last year, Vietnam earned 76 million dollars from yarn exports to Thailand and spent 194 million dollars on importing fabric from the country.
The co-operation of the two sides would also help the industry better exploit the Asean market of 600 million people, when the Asean Economic Community becomes effective by the end of the year.
With increasing costs in China, as well as competitiveness with other industries, many garment and textile producers have shifted their production base to Asean countries, including Vietnam.
Vietnam has signed, and is negotiating, a number of free trade agreements. Thai enterprises want to enhance co-operation with Vietnamese firms to produce fabric and materials in Vietnam to take advantages of benefits brought from trade agreements.
Spain’s textile sector is coming out of the recession.
The number of Spanish suppliers of fabrics, fibers and accessories such as buttons had plunged by about a third since 2008. Spanish textile firms were slow to innovate and adapt to the increasingly fast-changing demands of the fashion industry.
Many company bosses in the sector still have a mentality of industrialists, not of entrepreneurs. But last year, the number of textile firms stopped falling for the first time since 2008, stabilising at around 3,500 companies. The sector is benefitting from Spain's economic rebound - growth stood at 3.2 per cent in 2016, double the eurozone average -- and the disappearance of less competitive firms. The firms that survived were those that were export-oriented, able to diversify their order book and respond more quickly to customers' demands.
Spain's textile exports, which account for 60 per cent of sector-wide sales, rose by seven per cent last year. The focus on international sales adopted by major fashion retailers has also pushed smaller firms to modernise and shift their focus to activities with higher added value.
Companies have also diversified away from fabrics destined only for fashion and now also make technical fabrics for the automobile, agriculture or sports sectors.
Spinning mills in south India can expect stable cotton prices and supplies.
The cotton production for the 2016-17 season will probably be more than adequate to meet the demand from spinning mills. This should check a further rise in the price of cotton. Moreover international prices are expected to be benign as well thanks to a bumper crop in Australia, an 18 per cent increase in production in the US and restricted imports by China.
If cotton prices remain stable from here on, it will help contain raw material costs for a few quarters ahead. Meanwhile, higher domestic demand for textiles and garments and higher exports will improve demand for yarn.
Leading mills such as Vardhman Textiles, KPR Mills and Ambika Cotton Mills have reported double-digit year-on-year growth in sales over the past three quarters, although exports have been subdued.
And despite the high cotton prices and the challenges related to demonetization, these companies managed stable operating margins over the past three quarters in the range of 18.5 per cent to 20 per cent. Thanks to the robust performance, stocks of these firms have rallied substantially in the past year and are now trading close to the 52-week high prices.
Raymond has ordered 98,000 meters of khadi fabric from the Khadi and Village Industries Commission (KVIC).The order is worth over Rs 2 crores. This is the largest ever order received by KVIC from any corporate giant.
Of the total 98,000 meters of fabric, 32,000 meters will be supplied by the end of this month and the rest by May end.
Earlier, in January and February, Raymond took more than 6000 meters of various different fabrics from KVIC for testing and sampling. As per the agreement Raymond will procure a minimum of Rs 2.50 crores worth of fabric every year.
After joint visits, Raymond has selected various clusters from Gujarat, Rajasthan and other places to procure grey and finished khadi fabric. Raymond will also provide design inputs to create high end designer wear using khadi fabric.
Khadi is heralding the entry of corporate and private sector giants into marketing of khadi fabric and thus providing sustainable employment and livelihood support to the artisans.
KVIC is taking several initiatives to increase the sale of khadi, which today stands under one per cent among total textile sales in the country. In the financial year 2015-16, khadi sales stood at Rs 1,510 crores. For 2016-17, KVIC expects to achieve a turnover between Rs 1900 crores to Rs 2000 crores. The target is to achieve Rs 5000 crores in two years.
India’s new textile policy will focus on a three-pronged approach to boost the growth of the Indian handicraft sector, which is facing tough competition from international players.
The approach involves incentivising expansion of the production base for quality manufacturing of handicraft products used for interior decoration and lifestyle purposes.
The policy is focusing on promoting premium handicraft products for the niche market along with preservation and protection of heritage and endangered crafts.
The new policy aims to achieve 300 billion dollars of textile exports by 2024-25 and envisages the creation of an additional 35 million jobs. Various initiatives have been launched to strengthen textile production and encourage the industry to cater to domestic and international markets efficiently.
The textile industry is a diverse sector, which includes everything from small handloom factories to large garment plants. The sector operates in both organised and unorganised forms and is known for its close association with agriculture.
The government is encouraging investment in the textile sector through 100 per cent foreign direct investment via the automatic route.
In 2014-15, the industry recorded a growth rate of 5.4 per cent. As far as machinery is concerned, 24 per cent of the world’s spindles and eight per cent of the world’s rotors are present in the country.
Some 57 garment factories in Laos produce clothing for exports, 28 factories produce clothes for exporters and the domestic market, and the remaining 31 factories produce parts of clothing.
These factories create 27,000 jobs for local people, with 90 per cent of jobs going to women. These factories have FDIand the FDI has come mainly from Thailand. This is 60 to 80 per cent. The remaining is from France, Hong Kong, Italy, Taiwan. Now the new investment is coming in and it is mainly from Japan. Japan has set up four new factories. Japan is shifting investment away from China. The investment has gone into machinery, merchandising. These factories are mainly into men’s wear and women’s wear.
The EU is the main clothing export market for Laos, while Japanese investors are interested in moving their clothing production base from China to Laos.
In 2016, Laos’ garment exports to the EU fell ten per cent; to Japan fell five per cent; to the US fell 21 per cent decline; and to Canada fell 56 per cent.
However Laos’ garment exports to other countries increased 64 per cent.
Shortage of workers is a chronic problem in the sector, resulting in a reduction of garment exports.
The European Union has threatened suspension of trade privileges for Bangladesh if labor standards are not improved further. The suspension would mean that Bangladesh would have to pay 12.5 per cent duty for exports to the 28-nation bloc.
At present, the country enjoys zero-duty access under the EU's Everything But Arms (EBA) scheme.
Bangladesh will need to demonstrate that it is taking concrete and lasting measures to ensure that labor rights are respected.
Under GSP (Generalised System of Preferences) regulation, beneficiaries are required to respect international principles of human rights and labor rights in order to continue to benefit from this preferential trade regime with the EU.
The EU wants Bangladesh to address issues pertaining to freedom of association and collective bargaining. It has called for full freedom of association for workers in the export processing zones, and allowing workers' organisations to associate with their counterparts from outside the export processing zones.
In 2015, Bangladesh was by far the largest exporter to the EU under the EBA scheme. The country accounted for 65.7 per cent of the EBA exports.
Last fiscal year, Bangladesh's exports to the EU stood at 18.68 billion dollars , which is 54.57 per cent of total exports in the 12-month period.
Vietnam in the first two months of this year has seen an increasing foreign direct investment from China.
A total of 721.7 million dollars of Chinese FDI was recorded in Vietnam in the two-month period, up 152.78 per cent year-on-year, accounting for 21 per cent of the country’s total FDI. China has become the second largest FDI contributor to Vietnam, after Singapore.
There is a clear trend of transferring Chinese capital into southeast Asian countries including Vietnam. In other southeast Asian nations such as the Philippines, Malaysia, and Thailand, Chinese investors are also pouring money in giant projects.
Chinese companies’ investment in Vietnam in January accounted for 22 per cent out of the country’s total foreign direct investment in the month.
This placed China in the third position among foreign investors in Vietnam in January, just behind Singapore and South Korea.
By the end of 2016, China’s total FDI in Vietnam placed China in the eighth spot among foreign investors in Vietnam compared to the thirteenth spot China was in in 2012.
Most Chinese-invested projects in Vietnam are concentrated in areas which have cheap labor but face a high risk of pollution such as garment and textiles, hydropower, steel production, chemicals and cement.
Bangladesh’s denim shipments to the US have remained stagnant for the last seven years.
Among the reasons for the slow growth are the growing popularity of overdyed fabrics and higher imports from the US' neighboring country Mexico.
In recent years, the US has increased denim imports from Mexico due to competitive prices and shorter lead times. Besides, American retailers get duty benefits for sourcing from Mexico. Bangladeshi garment imports are subjected to 15.62 per cent duty upon entry to the US, while Mexico’s wares get duty-free access. Moreover, although the US does not produce a lot of garment items for export, American manufacturers, especially those in Los Angeles, make a huge quantity of denim products.
Another important reason for the slow growth of denim exports is that US retailers purchase low-cost denim products in bulk from China.
Despite slow growth in denim exports, Bangladesh still remains the third largest supplier in the US market. Only China and Mexico supply more denim to the US than Bangladesh does.
The share of Bangladesh in the US denim markets is 12.03 per cent, while that of China and Mexico is 26.04 per cent and 25.40 per cent.
Bangladesh presently has around 30 denim producing factories.
After three days of steady business between March 15-17, 2017, new discoveries and networking amongst global industry, the world’s largest apparel fabrics and accessories trade fair for Spring/Summer closed its doors with record number of exhibitors. Nearly, 3,341 exhibitors from 26 countries and regions made the most of Intertextile Shanghai Apparel Fabric’s global platform, a 5.9 per cent increase compared to 2016 (3,155 from 27 countries).
After three days of steady business between March 15-17, 2017, new discoveries and networking amongst global industry, the world’s largest apparel fabrics and accessories trade fair for Spring/Summer closed its doors with record number of exhibitors. Nearly, 3,341 exhibitors from 26 countries and regions made the most of Intertextile Shanghai Apparel Fabric’s global platform, a 5.9 per cent increase compared to 2016 (3,155 from 27 countries). The buyer number remained steady, with around 71,000 visitors from 103 countries and regions attending (2016: 71,163 from 100 countries and regions). This included buyers from concurrent Yarn Expo, CHIC and PH Value fairs who also attended Intertextile Shanghai.
As Wendy Wen, Senior General Manager, Messe Frankfurt (HK) Ltd said, “This fair is one of the most important events for worldwide textile market, and the strong business results for exhibitors and buyers this edition once again validates this. The amount of new business that was generated here this week, as expressed by many exhibitors, was the most pleasing aspect for us. This is due in part, , to our efforts over the last few editions to improve the quality of buyers sourcing at the fair, as well as a strong focus on our product zones which target the growth areas of the market. We have also continued our work with the venue to ensure service standards continue to improve, which has provided a more conducive environment all-round for business to take place.”
Happy Exhibitors
Amongst the many exhibitors reporting strong results were two world-renowned brands returning to the fair. With long participation at Intertextile Shanghai, they managed to meet new, quality buyers in this edition. “Although we are always exhibiting here, we still see new people at the fair and can always find potential customers,” Eberhard Ganns, MD, Union Knopf (HK) Ltd, Germany, explained. “Many companies in China are growing in size as well as quality, so they are interested in our products. Around 70 per cent of people at our booth have been new and interested customers, so Intertextile Shanghai is the show to be and is an absolute must! We are telling everyone if you want to be serious in this business then you have to be here.” Ganns also said they didn’t just receive interest from Chinese buyers, who anyway have significantly increased in recent years, around 20 per cent of visitors were from overseas including Asia, Europe and the US.
Korea’s Hyundai Chemical has been participating in the Spring-Autumn editions of the fair for four years, with Youn Seok Jang, Overseas Sales Team Manager, explaining the reason for returning is Intertextile Shanghai’s ability to attract the right buyers. “We obtained over 50 business contacts from both new and existing clients over two days. A large number of contacts were domestic Chinese buyers, while buyers from the Americas and Europe also showed genuine interest in our latest products. The fair keeps getting better year after year, and we are able to connect with enough new buyers every edition to make it worthwhile for us to come back repeatedly.”
Unbeatable sourcing platform for global industry
Returning American buyer Steven Fuller, Director Men’s Woven’s, Tommy Bahama, was at the fair to source unique and innovative fabrics. “I have been to many previous editions and this is one of the most comprehensive sourcing platforms for our company to gain contacts. There is no place in the region that has these many suppliers to choose from. I met companies who develop their own fabrics, and have also had the chance to speak with the product developers, which is helpful in explaining the nature of their product. This also makes Intertextile a central meeting hub for key industry players. This edition we connected with over 20 suppliers, while having already placed orders with four of them, including from China, Korea and Taiwan. Overall, I am pleased with the fair and like every year, it is able to fulfil our sourcing needs. We will definitely be back again this October.”
Autumn edition next October
Intertextile Shanghai Apparel Fabrics-Spring Edition 2017 was co-organised by Messe Frankfurt (HK); the Sub-Council of Textile Industry, CCPIT; and the China Textile Information Centre. The next edition, Intertextile Shanghai Apparel Fabrics – Autumn Edition 2017, will take place from October 11-13.
