FW
The Fair Labor Association (FLA), a non- profit collaborative effort of universities, civil society organizations and businesses, has released its first annual compensation report, highlighting data on the earnings of workers in 124 apparel and footwear factories assessed by it last year. This is the first-of-its kind collection and publication of wage data and analysis that is part of a commitment by the FLA and its affiliates to improve compensation for workers in global supply chains.
From each factory where assessors of FLA collected compensation data, the Association has compiled a chart that depicts how much workers are earning, compared with other local benchmarks such as the legal minimum wage, World Bank poverty levels and cost-of-living figures developed by governments, unions, non - governmental organizations (NGOs) and others.
Wanting to place workers' compensation in a local context, these wage ladder charts provide a snapshot of workers' purchasing power going by their current compensation levels in each of the 21 countries where FLA assessors collected data. In all the four factories assessed in Bangladesh last year, average compensation fell below the World Bank poverty line for a three-adult-equivalent household.
The annual compensation report also enlists the FLA's 2015 findings of legal pay violations with 20 per cent of the factories assessed found to have miscalculated overtime pay and six per cent of factories found to have violations of minimum wages. On the other hand, compensation for workers in assessed facilities in Cambodia, the Dominican Republic, India, the Philippines, and Sri Lanka (and for migrant workers in Jordan) averaged above World Bank poverty lines, though the FLA found that purchasing power of compensation for these workers remained comparitively weak. Average compensation was found to be highest in relation to the World Bank poverty line in the 14 factories assessed of the United States.
The Association will continue to collect compensation data in its 2016 factory assessment cycle and in subsequent years help steadily to increase awareness among companies, unions, NGOs and other interested stakeholders
Bangladesh’s export earnings declined by 3.49 per cent in July 2016 compared to July 2015. Major exports like readymade garments, home textiles, leather and leather products and footwear, agricultural products and frozen and live fish faced negative growth and thus pulled down the overall merchandise shipments.
Earnings from knitwear recorded a 4.45 per cent negative growth compared to the corresponding period of last fiscal. The earnings fell short of the set target by 16.68 per cent. Earnings from the woven sector witnessed 4.36 per cent negative growth. The earnings fell short of the target by 29.65 per cent.
Home textile export earnings declined by 18.22 per cent compared to the corresponding period of the last fiscal.
Earnings from jute and jute goods posted a 25.71 per cent growth. Export earnings from frozen and live fishes declined by 23.48 per cent. Agricultural products, leather and leather products, leather footwear and furniture recorded 5.85 per cent, 2.26 per cent, 4.31 per cent and 27.39 per cent negative growth.
Earnings from plastic products slightly grew by 0.96 per cent though it fell short of the target by 13.60 per cent.
The government has set a total export target for the current 2016-17 fiscal year at 37 billion dollars.
People in China like US cotton. They appreciate its quality and would buy more of it if they could get quota restrictions lifted. Shane Stephens, National Cotton Council chairman, who recently led a delegation of US cotton leaders to China, said that the Chinese textile manufacturers have an insufficient volume of quality cotton and that is why they want more high quality US cotton. Stephens was addressing a joint summer meeting of the American Cotton Producers and Cotton Foundation at Lubbock, Texas.
He pointed out that a spokesman from the US Embassy in China said although relations between the US and Chinese governments have cooled down in recent years, the relationship between US and Chinese cotton industries remains cordial. Chinese cotton industry has tremendous respect for the Cotton Council. He hoped to see cooperation from US cotton to ensure a stable supply of high quality cotton. Better quality cotton will allow Chinese mills to produce more high-end goods.
The 16th edition of Knit Show held at Tirupur once again proved to be a successful event as most stakeholders from the apparel manufacturing supply chain were there with their latest machines, fabrics and accessories. All kind of printing technologies in the field of digital, screen and direct-to-garment dominated the show. Well known names like Grafica Flextronica, Cheran Machines India, Digital Graphics Incorporation, ROQ, MHM, Negi Sign Systems & Suppliers, Dhaval Colour Chem, Lordz, Wenli, Apsom Infotex displayed their printing machines.
Grafica Flextronica and Cheran Machines India, which were earlier mainly into screen printing, displayed their digital printers for the first time. This is indeed a positive development as far as innovation in the printing domain is concerned and almost every company dealing in printing equipment opined that all kind of printing facilities will grow in Tirupur.
The fair also witnessed advance technology in cutting room solutions. Companies like Serkon Textile Machinery; Turkey displayed its solution in India for the first time. The event saw the presence of both local and international players and was marked by a high footfall. Visitor presence was good at most of the booths. However, some visitors were of the opinion that there were very few fabric companies present at the fair, especially in the woven segment.
Apparel Resources met many exhibitors at the show and all of them said that they were pleased with the footfall and visitors response. Overall, the fair managed to impress people with its avant-garde exhibits.
Teams from Next Sourcing, Evesyl Enterprises, Rupa & Company, Anbu Apparels India and Shivam Exports opined that the fair was quite impressive as far as printing technology was concerned, but in the future, it can add value by including more fabric companies. Overall, the fair managed to impress people with its avant-garde exhibits.
"Since 2013, Bangladesh does not have the facility of Generalised System of Preference (GSP) which was suspended by the US after two devastating accidents. With the Export Promotion Bureau (EPB) projecting Bangladesh’s garment exports to hit $28.09 billion in the FY2015-16 with 10.21 per cent growth, it is being hoped that the US would change its stance on GSP for Bangladesh."
Since 2013, Bangladesh does not have the facility of Generalised System of Preference (GSP) which was suspended by the US after two devastating accidents. With the Export Promotion Bureau (EPB) projecting Bangladesh’s garment exports to hit $28.09 billion in the FY2015-16 with 10.21 per cent growth, it is being hoped that the US would change its stance on GSP for Bangladesh.
The United States offers GSP to provide duty-free entry into the US market for nearly 5,000 products from 122 countries. Except Bangladesh, all members of South Asian Association for Regional Cooperation (SAARC) are eligible for GSP. Bangladesh lost out when the readymade garment (RMG) sector hit headlines because of Rana Plaza factory building collapse and the Tazreen Fashions fire that killed more than 1,200 workers. However, the US GSP scheme does not cover Bangladesh’s RMG sector, and that’s why the US action did not directly affect export of RMG to the American markets.
Bangladesh’s exports compete with China
In recent years, Bangladesh’s export percentage to the US has been dropping. In 2015, it earned $5.40 billion as compared to $4.83 billion in the previous year. The same year, the US started importing clothing products worth $85.16 bilion from across the globe. Bangladesh’s share was 6.34 per cent, China’s 35.86 per cent and Vietnam’s 12.40 per cent in terms of value. So, when Vietnam can benefit from the GSP, Bangladesh too can do so.
Working towards bringing Bangladesh back
Even as US buyers cut prices, triggering great concern for Bangladeshi exporters, US Republican presidential candidate Donald Trump has spoken in favour of Bangladesh garments. He has said that the quality of shirts from there is good. Bangladesh offers ease of doing business while import-export is faster. Research and Development (R&D) on new styles is faster as one can import fabrics in three days as compared to India where it takes 10 days. It is being hoped that the US would change its stand on GSP for Bangladesh. Also, Bangladesh should improve political understanding with the US, bring in lobbyists and integrate inter-ministerial coordination efforts. It should also boost bargaining power and improve economic diplomacy.
The US had introduced GSP to promote exports of low income countries to industrialised ones in order to support their economic growth and development. However, Bangladesh did not benefit from it in the last 37 years before it was suspended.
Bangladesh exports tobacco, apparels, sporting equipment, porcelain china, plastic products and a small quantity of textile products. According to the US Trade Representative (USTR), China secured top position in exporting RMG to the US with $30 billion in 2015 while Vietnam earned $10.5 billion. India exported apparel items worth $3.6 billion with 7.78 per cent growth than the previous year’s export earnings. Bangladesh is the third largest exporter of clothing products to the US.
In the view of Indian Credit Ratings Agency (ICRA), a 12% duty recommended by the Arvind Subramanian Committee is likely to have a negative impact on the textile sector especially the cotton value chain that is currently attracting zero central excise duty (under optional route) unlike the man-made fibre sector. Hence, there is an incentive for the downstream players in man-made sector to avail the Input Credit Tax (ITC). ICRA has pointed out that most of the cotton based textile players in the value chain operate through the optional route that results in lower duties. The key reasons for this are exemption on cotton and hence, lower ITC for cotton spinning mills. As a result, cotton yarn manufacturers opt for optional duty route without claiming ITC and pay zero excise duty. As Anil Gupta, VP, Corporate Sector Ratings, ICRA points out “With an optional duty structure at the cotton yarn stage itself, the downstream sectors, i.e. weaving, processing and garments also operate under the optional route. This is reflected in the less than 1 per cent effective excise duty rate applicable to 480 spinning and weaving companies rated by ICRA, which accounted for Rs 57000 crores revenue during FY2015.” He adds, with GST on textile, the textile value chain will become more organised as it will make GST non-compliant suppliers uncompetitive vis a vis GST-compliant suppliers, as buyers won’t be able to take ITC. “Due to the reduced tax advantage of cotton yarn vis a vis man-made yarn, there can be a gradual shift in the domestic textile industry, which currently operates with a fibre mix of cotton: manmade of 60:40; as against a global average of cotton: manmade of 40:60.”
Under GST, textile players who are oriented towards domestic markets will be able to avail ITC on domestic capital goods (but not the import duty) as their sales will be subject to GST. Accordingly, this will reduce the cost of capital investments and hence will be positive for the players operating in domestic markets.
Exports will be zero rated under GST as there will be transparency and availability of full ITC for exporters which is currently being provided by duty drawback schemes. Accordingly, the duty-drawback will lose its relevance under GST. However, sectors where the drawback rates are higher than actual indirect taxes on inputs may face profitability pressures, an ICRA assessment states.
Groz-Beckert has a wide range of products from the weaving segment ranging from healds, drop wires and heald frames to machines for weaving preparation. The jacquard heald is a new addition to the product range. The transparent large circular knitting machine has a gage gradient of E10 to E50. There are two other transparent machines from the flat knitting and warp knitting fields. Each of the three acrylic glass machines has individually removable elements for detailed viewing.
The litespeed needle impresses with its optimized needle geometry, which increases the service life, reduces oil consumption, reduces the machine temperature and leads to energy savings of up to 20 per cent in the knitting process.
In addition to special needle solutions for the filter industry, Groz-Beckert has solutions for the geotextile, filter and paper-machine felts and automotive applications. For high tensile strength as required in filters, a needle with a teardrop-shaped working part, like the Teardrop from Groz-Beckert, offers clear advantages.
Groz-Beckert is offering special products for the nonwoven carding sector to supplement the extensive product range for the short and long staple spinning industries. With the innovative EvoStep and SiroLock metallic card clothing, the company is responding to the ever increasing requirements on the market.
Last March, the governments of the East African Community that includes Kenya, Tanzania, Uganda, Rwanda and Burundi had proposed a ban on imports of secondhand clothes to their regional trade bloc. The ban would outlaw donations of clothing from wealthier countries by 2019. The logic was that by ending the trade of used garments, the apparel industry in these countries would be revitalised, it would create jobs and help exports and bolster their economies.
Imports of secondhand clothing has been rising over the past two decades with Uganda and Tanzania witnessing a 233 per cent and 1,100 per cent growth respectively in imported worn clothing in the last 20 years. While many traders are earning a living through the sale of these donations, the governments proposing this ban argue that they will be able to create better jobs within the textile industry, more than offsetting any economic loss faced by the traders.
It seems unlikely that the ban will actually become a law. But the very fact that it exists is fascinating on several levels. Once again, we see unintended consequences of well-meaning foreign aid. In Uganda, for example, it is estimated that secondhand garments make up for 81 per cent of all clothing purchases leaving little market share for locally produced apparel. Uganda imports 1,500 tons of used clothing each year from the US alone that is just one of many countries to which the country exports used clothing. Kenya had a clothing industry that at its pinnacle employed 500,000 people and today only sustains roughly 20,000 jobs. Even if enacted, the ban won’t necessarily spur local apparel production.
US-based Polartec, LLC, that manufacturers fabrics for garment manufacturing companies and is best known for inventing fleece materials for companies like Patagonia, North Face and LL Bean is relocating part of its textile operations from Massachusetts to south eastern Tennessee at its Cleveland factory. The company that makes specialized fabrics for outdoor wear as well as the military acquired the United Knitting Mills in Cleveland a year ago and started the process of shifting from Massachusetts.
Polartec President Gary Smith said that the company is investing nearly $10 million into the United Knitting Mills site in Cleveland for plant upgrade and new equipment which will bring total employment to 200 people by next year. Merging the two companies will allow Polartec to employ its innovative technology — the company has more than 150 patents — in a more efficient plant, said Jerry Miller, the former head of United Knitting Mills who will continue as president and general manager of Polartec's Tennessee manufacturing operations.
Tennessee’s business friendly environment including lower energy and tax costs compared with Massachusetts and strong work ethic in Cleveland are a draw. They are making a big bet on this facility, but they see a real opportunity for them. Smith says he is moving the company to a better mix of business with more efficient production to help the textile company survive and thrive in the United States, rather than move production offshore as most other US textile and apparel companies have done over the past half century.
Polartec is the successor company to the 110-year-old Maldin Mills in New England. The company was later renamed Polartec LLC in March 2007.
The Director General (DG) of Nigerian Textile Manufacturers Association (NTMA), Hamma Kwajaffa has disclosed that the country currently spends over $4 billion annually on importing textiles and readymade clothing, despite the government’s intention to revive the textile sector in recent times. Textiles used to be Nigeria’s foremost industry and the second largest employer after the government. Then it used to use indigenous raw materials such as cotton.
Kwajaffa is of the opinion that Nigeria has the potential to produce textiles for the local market of 170 million people. It also exports textiles to the ECOWAS market of 175 million people as well as to the developed world such as the United States under AGOA and EU GSP scheme which Kenya, Ethiopia, Lesotho, Madagascar and a number of African countries are already exploiting. The prevailing unprecedented harsh environment has undoubtedly dealt a serious blow to the already fragile industry. He said unless urgent steps are taken by the government to address key issues raised by the industry, the ray of hope that had arisen from the recent government initiatives may be lost.
Influx of smuggled goods continues to flood major textile markets. It not only undermines the local industry but also steals their jobs and importantly deprives government of revenue.
