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In the light of textile mills facing closures, owing to the lack of conducive policies to promote growth, the standing Committee on Textile of the Senate took up the issue with the government. The Chairman of the committee Mohsin Aziz says that APTMA has submitted a detailed report, suggesting the restoration of the sector by addressing the issues related to tax, tariff and investment.
As per Aziz the export-oriented sector is lagging behind in Pakistan while it has witnessed immense growth in recent years in neighbouring countries. The Pakistan textile industry has clocked 22 per cent growth during the last five years, whereas the growth rate in Vietnam, China and India has been 230 per cent, 97 per cent and 94 per cent respectively. Aziz pointed out the textile industry is burdened with Rs 38 billion gas infrastructure development cess, Rs 78 billion electricity surcharge and Rs 65 billion innovative taxes. It all adds up to Rs 157 billion per annum, which is 12 per cent of the sales of the industry.
Aziz said the committee has stressed upon the need for restructuring the electricity tariff policy and bringing in the zero rating regime for textile operators, which is in sync with WTO laws, in order to make the sector more competitive and growth-oriented. He also pointed out many bottlenecks on the investment side and said the high cost of doing business is ruining the textile industry.
As a regional free-trade agreement called P-4 between New Zealand, Chile and Singapore, the Trans Pacific Partnership (TPP) had a humble beginnings. Brunei too joined this alliance in 2006. Former US President George W Bush, in 2008 announced that the country too would join the TPP. Then, Australia, Peru and Vietnam joined in the negotiation and later, Canada, Mexico, Malaysia, and finally, Japan joined the list of 12 countries, which were supposed to control or link 40 per cent of the global economy.
The TPP countries would certainly enjoy privileges of lower or zero tariff for export on goods to the member countries. Thus, Bangladesh’s garments and textiles export sector too would be affected as the US and Canadian markets under TPP countries. This is of great concern for Bangladesh.
Bangladesh experts are sceptical about the full execution of this agreement. The ‘yarn forward’ clause is one of the reasons. This means, to qualify for preferential tariff, fabric has to be made from fabric woven in a member country or that fabric has to be made from yarn made in a member country.
Bangladesh needs to start the process to counter any possible effect of TPP on its exports. It is important to revive GSP status since this will be seen as the first obstacle to start any preferential trade talk. Also, soon after the alliance is reached, phase two will begin and new countries would join in. Thus, Bangladesh could look to be included in TPPs second phase.
Bangladesh Apparel and Safety Expo is being held from August 6 to 8, 2015. It got spot orders for export of two million pieces of jackets and shirts and machinery, sweater machine, fire equipments and accessories.
Through this exposition Chittagong showcased its products to global buyers and proved its potential. Representatives of global buyers participated. The spot orders came mostly from Russian buyers. The expo showcased locally developed apparel products and provided an ideal opportunity for global apparel retailers to meet clothing manufacturers of Bangladesh. The safety pavilion at the expo acquainted local apparel manufacturers with a wide range of safety equipment and service providers.
The expo had 73 stalls in total. Among these were 17 for readymade garments, one for fabric, two for garment accessories, one for garment fabric (local), 18 for machinery, 25 for fire equipment, and seven for service providers.
Chittagong was chosen as the host city of the event. This has special significance. Chittagong is the commercial hub of Bangladesh. About 95 per cent of the country’s apparel trade flows through this port. The first and the largest export processing zone of Bangladesh is located in this city.
Bangladesh has a vision of reaching $50 billion of readymade garment exports by 2021. The seminars focused on ways to reach this target.
www.bgmea.com.bd/ctgexpo/
Spanish company Inditex having a globally successful brand like Zara under its portfolio has crossed a valuation mark of over $100 billion last week, with shares witnessing a rise of 36 per cent in the last year. The achievement, only held by select 80 companies worldwide, has now made Inditex the most valuable company in Spain.
Inditex's founder Amancio Ortega is the second richest man in the world. His company's subsidiaries include Zara, Zara Home, Massimo Dutti and Bershka among others. Many studies have been written about how Zara managed to succeed with its fast fashion theory against its rivals like H&M. The company is known for bringing ensembles inspired directly from the runway to its stores within two weeks. Industry experts say that the Zara strategy has been working in favour of the brand for two reasons – one because loyal consumers keep visiting the store to check new collections and then they also feel compelled to buy because the styles can fly off the shelves pretty fast.
According to a Goldman Sachs report which unravels the secret behind Zara’s success, “Unlike fast-fashion retailers, which have buying teams sourcing current trending fashion from third-party vendors, traditional specialty retailers have design teams creating product they believe is going to be trending 12 months out.”
While the apparel retailers are being cautious about their expansion plans, at the beginning of the year Inditex announced its plan to open eight new locations in Manhattan by the end of 2015.
www.inditex.com
Peru and El Salvador are currently in negotiations for a free trade agreement that could benefit their textile industry in a big way. The apparel industry in both countries is one of the most powerful in the region and together they could result in an interesting alliance.
The deal would fuse existing Salvadoran trade agreements, its economy and excellent labor and financial conditions with a long-standing Peruvian textile tradition, high-quality Peruvian products and Peru's added value.
Reaching a free trade agreement or at least a bilateral trade deal could further boost the apparel industry of both countries. El Salvador’s textile and apparel industry has been working towards structural changes, building capacity and meeting international compliance and standards in labor and environmental regulations. A robust and vertically integrated synthetic textile manufacturing cluster has developed over the past several years.
Peru’s economy is growing, and the spread of malls and stores is generating opportunities for local brands. Peruvian manufacturers are churning out fashionable apparel, with higher quality and faster delivery schedules. Attention is being paid to value added and upscale garments.
Although the free trade agreement hasn’t been reached between the two governments yet, the five-year negotiation process would appear to be ending soon.
Vietnam’s textile exports to countries that are part of Trans-Pacific Partnership (TPP) were almost 70 per cent of the total export value and is predicted to grow substantially once the agreement is signed. This is just in the first half of 2015. However, since 60 to 90 per cent of materials for textiles made in Vietnam are imported from countries that are not members of the TPP, the issue of rules of origin is a hurdle.
Among the TPP markets, the US is Vietnam’s largest, according to the Vietnam Textile and Apparel Association (Vitas). This comprised of 42 per cent of total textile exports in July, estimated at $5.18 billion, which had increased by 11.01 per cent compared to July last year.
Vietnam’s textile exporters, however have not paid much heed to the strict requirements on the origin of materials by TPP. It is the third-largest exporter to the US, however, a vast share of its raw materials are imported, mostly from China. Vietnam needs to use more of its own inputs to increase added value, as it will not be able to import materials from China. If it wants to benefit from the preferential tariffs provided under the TPP, this is what Vietnam would have to do when it joins the TPP.
The ‘yarn forward’ rule, according to Dang Phuong Dung, Vice Chairman and General Secretary of Vitas, would pose a major hurdle for Vietnam. As per the rule, all material used in production needs to be produced in countries that participate in the TPP. This rule would be an obstacle, as there were weaknesses in material supplies such as fabric and dyeing, which are dependent upon imports.
GHCL which manufacturer inorganic chemicals and textiles, plans to invest Rs 1,050 crores over the next few years for expansion of soda ash and textile capacity. While the company will spend Rs 950 crores in a two-phase soda ash expansion project in Gujarat, it will utilise Rs 100 crores in the next two years for expansion of its textile business.
Of the total Rs 2,400 crores top line recorded by the company last year, inorganic chemicals contributed 60 per cent and 40 per cent was accounted for by the textile business. Soda ash (chemically known as sodium carbonate) is one of the commodity chemicals used most commonly in glass, detergents and food processing industries. GHCL has a 24 per cent market share in the domestic soda ash industry.
The company has its own captive lignite mines and briquetting plant which gives it a major cost advantage. It produces dense soda ash which is normally used for the glass industry and light soda ash which is normally used for the detergent industry.
GHCL’s spinning facility in Tamil Nadu has a total installed capacity of 1,75,000 spindles and 3,320 rotors. The home textile plant is located in Gujarat with 162 air jet looms and 36 million meters of processing capacity.
ghcl.co.in/
India wants to promote its handloom industry and ensure that weavers are paid their rightful wages. Steps will be taken to catapult the industry to global levels, including enlarging the scope of e-commerce for handloom products. PM Modi The government has asked the film industry to popularise handlooms through films.
Textiles Ministry has been asked to institute awards for innovative design and branding initiatives in handloom. The government is committed to enhancing the income level of handloom weavers apart from putting in place a robust social cover for the weavers’ families.
The income of the weavers would be directly transferred to their bank accounts to prevent middle men from taking advantage. Three new social security schemes have been initiated for the benefit of the unorganised sector.
The Indian handloom industry, which employs about 4.3 million people, is the second largest employment provider for the rural population in India after agriculture. The sector accounts for around 15 per cent of the total cloth produced in the country excluding wool, silk and yarn. The country supplies 95 per cent of the world demand for hand woven fabric.
The US is a major importer of handloom products from India followed by UK and Germany. France, Belgium, UAE, Netherlands and Canada are some of the other export destinations for Indian handloom products.
At the Summer Outdoor Retailer 2015 being held in Salt Lake City, Bemis Associates announced the launch of its Terra and Fashion Meets Function collections to designers, innovators and leading apparel factories.
Steve Howard, Chief Executive Officer of Bemis Worldwide, said that Bemis offered products to the design and innovation community that would help them elevate their designs through bonding. Fashion Meets Function and Terra, the two collections provided key advancements in garment construction and were in step with today’s major trends, Howard added. He also stated that they were waiting to see what leading brands could accomplish without any limitations to their creativity.
Bemis Associates mentioned that natural fibres’ innate comfort, aesthetic and anti-odour characteristics, was the reason for leading athletic brands increasingly including them in their designs. Bemis’s Terra collection includes bonded applications that allow designers to seamlessly blend casual fibres in highly technical garments. Thus, without the bulk, the weight or the compromised comfort of cut and sew, designers can get the most out of natural fabrics.
The Fashion Meets Funtion collection Bemis says, is created to allow designers to create beautiful and versatile clothing that is functional and consumers can wear it throughout the day—from the gym to drinks with friends. Athleisure observes Bemis, dominates the marketplace today and people are wearing what appeals to them aesthetically and what fits best, irrespective of fitness or fashion trends.
India, for long, has been a global player in the overall textile and apparel sector, but in the sub-segment of intimate wear, India is yet to make in-roads in the world trade. The show this year will focus on how intimate wear manufacturing in India can be encouraged to attain global importance. It will focus on the strengths of the Indian industry that can be leveraged to position the country as a leading manufacturing destination for intimate wear.
Make in India the new focus
Under Prime Minister Narendra Modi’s ‘Make in India’ initiative, the
nation can tap endless opportunities to become the next big global lingerie manufacturer. To support IAAI in its ‘Make in India’ initiative, Santosh Kumar Gangwar, Minister of State for Textiles will inaugurate the show in the presence of Joint Secretary for Textile Exports Sunaina Tomar.
The highlight of Galleria Intima is to show leading intimate apparel brands of the world that the nation has the necessary resources to become a manufacturing centre. The country has been a major player in the overall apparel and textile market worldwide and plans to make an indelible mark in the intimate apparel sector as well. At Galleria Intima 2015, one of the central aims would be on how to ‘Make in India’ and selling ‘Made in India’ in the international market, while driving domestic consumption.
The intimate apparel category includes a vast range of items, from lingerie to underwear, loungewear and nightwear to shape-wear, swimwear, socks & stockings and more. The top five markets for intimate wear are: US, Japan, Germany, UK and France. The US is a leading importer, with a share of 24 percent worldwide. Currently, China is the largest supplier of intimate clothing worldwide, with a share of 44 percent in the global market. Manufacturing costs in Europe and America are excessively high, which has forced brands to source from Asia. China is a top supplier for years, but growing wages in the country have led to higher costs in manufacturing, turning attention of top brands towards other cost competitive countries. India can take advantage of this opportunity by setting up of OEMs of international brands. The event intends to draw the attention of seasoned brands towards the country as a potential site for setting up of their manufacturing units.
Head honchos of top brands will interact with local OEMs and local brands that can serve as potential OEMs. This event will also serve as a platform for these brands to tap opportunities of local markets with help of inputs from experts on consumer trends, besides providing value information on the local market scenario, its patterns as well as the maximum benefits that can be derived from it. Top international brands as well as national OEMs are expected to be present at the show.
About 15 Chinese companies are expected to participate, to showcase raw materials, making Galleria Intima 4.0 an all-encompassing platform for intimate apparel. Yusuf Dohadwala, the CEO of Intimate Apparel Associations of India says, “India has been a sleeping giant in the category of intimate wear. This is the time to wake the giant out of its slumber and show its true potential to the world. The ‘Make in India’ drive initiated by our Prime Minister is sure to help us in commencing the golden age of the intimate wear industry in the country. The next 5-10 years look very promising.”
This year, Galleria Intima will be held on August 26 and 27, in New Delhi. It is expected to be a major global affair. The organisers decided to shift the venue to New Delhi as it offers greater connectivity. This event is organised by the Intimate Apparel Association of India (IAAI) and has seen exponential growth in footfall and participants over its last editions. The event will showcase everything from fibres to laces, to hooks and packaging. It is expected to draw visitors from a wide variety of sectors including brand owners, manufacturers of intimate wear, designers, export houses, large format retailers, online retailers and buying houses. More than 1000 brands from India alone are expected to visit along with 80 exhibitors from over 10 countries.
