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More than a hundred textile mills in Pakistan may close if they do not get sales tax refunds. These mills are facing liquidity issues and a high cost of doing business. The industry has been compelled to borrow from banks. The view is that timely refunds payment will help in increasing the country’s exports by $4 to $5 billion.
A working capital blockage creates difficulties for exporters to complete orders on time. If the government is unable to immediately settle the amount, the industry wants bonds to be released against refunds. An alternative is to bring the export sector back in the zero-rate sales tax regime to minimise the refunds pendency.
Under law refunds have to be released within 45 days, but there have been complaints of delayed refunds for the last one year. In many cases, refund processing orders, which were to be honored in a certain time, were issued but cheques were not issued for six months. Some of the refunds were deferred in cases where invoices were issued by persons, who later became defaulters. The industry requests refunds of genuine taxpayers to be cleared forthwith. It says it is already facing a shortage of power and higher utility rates.
Textile mills in India want the duty structure on manmade fibers to be rationalised. They say this can propel the textile industry toward a higher growth rate. The convoluted duty structure in manmade fibers has for long been a major irritant in the development of textile sector. At present, while manmade fibers attract 12 per cent excise duty, cotton fibers attract none. Similarly, imports of some of the raw materials for producing manmade fibers are taxed heavily, while those of their finished products are taxed lower.
The industry has long been demanding a reduction in excise duty on manmade fibers, saying such a disparity is preventing domestic producers from scaling up operations. Consequently, India’s textile market continues to be cotton-driven. Such a situation hurts India’s export competitiveness in the manmade textile segment. While manmade fibers account for around 70 per cent of the world’s total fiber consumption, they make up for less than 30 per cent of domestic demand.
Moreover, raw materials such as purified terephthalic acid — used for making polyester staple fiber, filament yarn and film — attract a five per cent import duty. Recent initiatives like interest equalisation scheme, export incentives and duty drawback have helped the industry to improve export competitiveness and also increase its market share across the globe.
Pakistan’s cotton production has fallen to its lowest in 17 years because of poor weather and pest outbreaks, leaving the country reliant on imports. Adverse weather, increased pest pressure from whitefly and pink bollworm, and the high cost of inputs discouraged farmers from better crop management.
The worsened production outlook represents a fall of nearly 30 per cent year on year, to the weakest since 1998-99. Pakistan’s imports in 2015-16 are estimated at 2.70 million bales, more than triple those of last season. Pakistan is in fact the world’s fourth ranked cotton producer after China, India and the US. It normally relies on imports for only a small portion of its needs, and often on quality grounds. It purchases, for instance, long staple cotton from the US, but will be forced this year to turn for extra supplies to India and West Africa.
Pakistan’s cotton yield this season represents a drop of 22 per cent year on year. The country’s production hopes have been hurt by weak prices, with poor weather adding to crop woes. Cotton and cotton products contribute about 10 per cent to GDP and 55 per cent to the foreign exchange earnings of the country. Nearly 30 to 40 per cent of the cotton ends up as domestic consumption. The remaining is exported as raw cotton, yarn, cloth, and garments.
Birla Cellulose, the fibre business arm of Aditya Birla Group, brought together LIVA Accredited Partners Forum (LAPF) partners and international brands at Noida on January 8, 2016, which is the country’s garment industry capital. This event is held in collaboration with the Society of Noida Apparel Export Cluster. It is part of the Group’s efforts to create a one-stop platform for fabric makers to reach out directly to women’s wear exporters and international brands.
This is part of the Group’s ongoing efforts to nurture various textile chain partners in the garment export sector amid struggling garment exports from India. A tough competition is posed by cheap imports from China and South Asian countries.
The conference is being be attended by around 40 LAPF partners who will showcase their products to 160 garment exporters including international brands such as Marks & Spencer, Macy’s and Gap as well as national exporters like Shahi Exports, Orient Craft, Pearl Global and Richa & Co. Leading buying houses such as Triburg, Impulse, Li Fung and Asmara as well as Biba and ITC will also attend the conference. This LAPF conference is the third in the series, the first one was held in Jaipur and the second in Coimbatore.
The volume of US clothing and fashion imports from all sources grew 4.8 per cent year-on-year in September 2015. Despite rising wages and a strong currency, China continues to be the largest exporter to the US, as no country can match China in terms of the size of its supply base, range of skills, quality levels, product variety and the completeness of its supply chain.
However, Vietnam’s clothing and textiles industries are increasingly receiving encouraging responses from western buyers. So while shipments from China were up 1.48 per cent, nearest rival Vietnam grew at a much faster rate, jumping 10.6 per cent compared to September 2014.
Vietnam is clearly benefiting as transnational and domestic producers operating within the country’s borders are diversifying their supply chains in a bid to position themselves to take advantage of the opportunities the Trans Pacific Partnership might open for them.
The US economy is predicted to grow at an average of three per cent as of 2016, which, if true, bodes well for domestic consumption and imports of clothing and fashion items produced in Vietnam. China, anticipating the after-effects of the TPP, has already started moving a large volume of its investments to Vietnam to boost its garment sector and take advantage of the TPP, should the trade pact become a reality.
SP Apparels, manufactures and exports of knitted garments for infants and children and force behind menswear brand Crocodile has launched. Established in 1989, it operates 20 manufacturing facilities and reported a net profit of Rs 10.1 crores in fiscal 2014-15. It is a fully integrated textile company with operations spanning from spinning to retail and fiber to fashion.
The company has filed draft papers with capital markets regulator Sebi to raise at least Rs 215 crores through its initial public offer. SP intends to garner up to Rs 215 crores through a fresh issue of shares, while its existing shareholders will offload 9,00,000 equity shares.
Proceeds from the fresh issue will be utilised for repayment of debt, expansion and modernisation of its manufacturing facility at Salem in Tamil Nadu and opening of new stores for the sale of Crocodile products. The funds raised will be also used for addition of balancing machinery for its existing dyeing unit and other general corporate purposes. As of November 2015, its aggregate outstanding debt was Rs 251.8 crores comprising long term borrowings, short term borrowings and current maturities of long term borrowings. The company expects to realise the benefits of listing of the equity shares on the stock exchanges.
www.spapparels.com/
There is a move to include handloom weavers under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). MGNREGS is a rural job scheme. Under the scheme, workers are given a standard wage in the range of Rs 159 to Rs 241 a day, for 100 days a year.
Even though weavers are not unskilled workers, they earn much less than what an unskilled worker does. But they have refused to give up on this profession only because of family tradition and the love for the art. However, economically the weavers belong to the bottom of the pyramid, and the average daily income for many of them often falls below the mandatory wage provided to unskilled workers under MGNREGS.
At present, only silk farming from the textile segment is covered under the scheme. The textile ministry, however, has been seeking extension of MGNREGS to the entire textile and garment sector. Such a move can help tackle labor shortage in the sector, especially in the more labor-intensive garment factories. Most importantly, even unskilled workers could be given proper training, which they can benefit from.
The handloom sector provides employment to 4.33 million people across 2.38 million handlooms in the country and accounts for 11 per cent of India’s textile production.
nrega.ap.gov.in/
Work on apparel and garment manufacturing centers in the Northeast has commenced and is nearing completion in some states. The scheme for construction of apparel and garment manufacturing centers in the Northeastern states was launched in 2014. The objective of the scheme is to promote employment in the northeast states and encourage entrepreneurship, especially among women, in the area of garmenting. It covers various segments like silk, handlooms, handicrafts and apparels and garments.
Each apparel and garment making center set up under the initiative is estimated to generate direct employment for 1,200 people. Each state will have one center with three units, each having 100 machines. For local entrepreneurs with the requisite background, the required facilities to start a unit will be provided in the plug and play mode. Once such entrepreneurs get established, they can set up their own units, allowing the facility to be provided to new entrepreneurs.
The project will be fully funded by the Ministry of Textiles, with an estimated expense of Rs 18.18 crores for each state. The scheme has a total outlay of Rs 1,038.10 crores.
The Apparel Training and Design Centre has entered into a partnership with Juki India to offer product specialty courses and training in lingerie wear. ATDC is India’s largest vocational training network for the apparel sector. Indian consumers are becoming aware of the significance of inner wear. Based on the income classification of consumers, they can be identified as those who have less than five pieces, between six to 10 pieces, and over 10 pieces.
Juki produces different machines used for making lingerie wear especially bras. It has machines that can be used in cup making, strap making and cutting, D-ring attaching and advanced machines that do not need thread trimming after sewing.
Keeping in mind the need to bridge the skill and knowledge gaps in the lingerie industry, ATDC is announcing various courses. To begin with ATDC Bangalore will be conducting workshops for the industry and faculty. These are aimed at short programs on pattern making, design and style analysis, introduction to operations etc. A detailed training course of 300 hours is proposed to commence in the first quarter of 2016. This program will include basic designing, body measurements, pattern making, and introduction to materials used in lingerie wear in addition to practical sewing.
www.atdcindia.co.in/
Zodiac Clothing Company (ZCCL) has won Gold certificate in LEED certifications for its energy-efficient office. A trusted name in men’s wear for the last 61 years, ZCCL had recently renovated its corporate building and laying emphasis on energy saving items.
The building has been designed in such a way that sunlight reaches each floor made possible through a pyramid like rooftop skylight. Then, the office light fixtures are suspended in such a way that they project light both upwards and downwards. This helps to utilise 90 per cent of the light through reduced glare. Energy consuming projectors have been replaced with LED televisions so that less energy is consumed. Even the elevator has been replaced by a glass one which has V3F drive, thereby saving 50 per cent energy.
Windows have been laid out in a manner that natural light flows inside. Daylight sensors dim the light when there is sufficient sunlight and switch them on when there isn’t. Cooling at peak hours is provided high-energy efficiency water-cooled central chillers that use 0.67 KW per tonne instead of the normal 1.5 to 2KW per tonne.
All this has been achieved in a conventional building design. As Salman Noorani, MD, ZCCL, says, ‘if all commercial buildings in India were as efficient as ours, the country could cut energy production enough to meet the demands of the Koto Protocol’. He also believes that energy saved in this manner through green buildings can be used by the country wherever there is a shortage.
The LEED certifications acts as an extension of the identity of the brand.
