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"The escalating US-China trade war is driving many China-based manufacturers and their US clients out of China to other low-cost countries like Vietnam, Cambodia, etc, leather brand Steve Madden is shifting handbag production to Cambodia, Techtronic Industries is moving out to Vietnam while Flex is planning to shift production centres from Mexico to Malaysia. The US has so far levied 25 per cent tariff on $50 billion Chinese industrial goods and is planning to levy tariffs on another $200 billion Chinese exports. It has excluded most consumer goods from the tariff lists, yet many manufacturing and retail executives fear the range of affected products could widen with both Beijing and Washington refusing to concede."
The escalating US-China trade war is driving many China-based manufacturers and their US clients out of China to other low-cost countries like Vietnam, Cambodia, etc, leather brand Steve Madden is shifting handbag production to Cambodia, Techtronic Industries is moving out to Vietnam while Flex is planning to shift production centres from Mexico to Malaysia.
The US has so far levied 25 per cent tariff on $50 billion Chinese industrial goods and is planning to levy tariffs on another $200 billion Chinese exports. It has excluded most consumer goods from the tariff lists, yet many manufacturing and retail executives fear the range of affected products could widen with both Beijing and Washington refusing to concede.
Emergence of new lucrative markets
The manufacturing industry needs to come up with strategies to diversify this risk. Factory owners in China are already shifting production to other
developing countries such as Bangladesh, Cambodia and Vietnam over the past decade in search of cheaper wages and a hedge against the political and economic risk that comes from reliance on one country. The trade war will further intensify this shift.
Vietnam has been at the centre of many companies’ ‘China plus’ manufacturing strategies in recent years, attracting investments from the companies like Samsung, the South Korean electronics group, Daikin, the Japanese air conditioning group, and Techtronic. Many US and European apparel fashion brands have shifted their production to Vietnam with a just few spare facilities left in China.
China retains its dominant position
Though tariffs and the uncertain future of US-China relations have unnerved many manufacturers, China is still likely to retain its dominant position. According to WTO, the country still accounted for 35 per cent of global clothing exports last year, compared with just 6.5 per cent from Bangladesh, 5.9 per cent from Vietnam and 1.6 per cent from Cambodia. It is in a similar position for office and telecoms equipment.
Retailers to bear the brunt
Although the onus of paying tariffs will officially fall on the US importers of the affected products, the entire supply chain from consumers to the Chinese factories are likely to be affected. According to Panjiva, a research unit of the credit rating agency S&P, of the 200 US companies that are depending on these tariffs for their main earnings, only 47 per cent plan to raise prices for consumers.
Also the percentage by which these prices are likely to rise is comparatively lesser as tariffs are charged on wholesale import prices, before retail mark-ups. As Edward Rosenfield, CEO, Steven Madden notes retail prices would need to rise by only 3.5 per cent to offset a 10 per cent tariff. But retailers are unlikely to pass on this cost to consumers; affecting their own profit margins in the bargain.
The EU Ecolabel promotes products that have a low environmental impact across their entire life cycle - from extraction of raw materials, to manufacturing and packaging, use, and finally disposal or recycling. Developed by the European Commission in 1992, the EU Ecolabel features a green flower surrounded by 12 blue stars. Its main objective is to educate and guide consumers to choose environmentally conscious products. Close to 70,000 products bear the logo.
Virtually every product that is manufactured for distribution, consumption or use in the EU market is eligible for the EU Ecolabel. Focusing on the part of the process where the product has the highest environmental impact, the EU Ecolabel product-specific criteria ensures that any product bearing the EU Flower has passed the most stringent environmental tests. The product’s impact on the environment, biodiversity, energy and resource consumption, waste generation and emissions are examined.
Because of its size and scope, the textile industry is one of the biggest greenhouse gas emitters on earth. Textile products have a great environmental impact—they use large quantities of water and pesticides to grow cotton, use water in natural fiber production, create emissions stemming from producing synthetic and cellulosic fibers and use non-renewable resources for synthetic fibers.
Intradeco Apparel has been given the Repreve®'s Champions of Sustainability Award. The award recognises the company’s efforts towards sustainability and environment protection. The company, by partnering with Unifi and incorporating REPREVE®, one of the most trusted, traceable fibers, has produced over 6 million garments that have been sold in Walmart stores over the last decade. It has diverted over 50 million plastic bottles from landfills and oceans over the last 10 years, helping to mitigate the volume of plastic that threatens the future of our ecosystems.
For Intradeco Apparel, sustainability has always been the topmost priority. Repreve enabled Intradeco offers a wide array of performance quality garments to major retailers across the US, like Walmart, and in multiple brands such as Works, Russell and Swisstech, etc. Intradeco has employed eco-friendly practices including maintaining energy-efficient manufacturing facilities, using renewable energy through the use of solar panels and utilising sustainable packaging materials.
RadiciGroup will participate in the 57th edition of Global Fiber Congress (GFC), the international meeting on innovation in fibres that takes place in Dornbirn, Austria. The company will launch the RadiciGroup Performance Yarn Business Area that offers a range of yarn increasingly in line with market needs. The products on display include: PA 6 and PA 6.10 BCF yarn, which blend lightness, durability, design, sustainability and reduced costs to meet the requirements of new trends.
These tufted carpets are the best solution for the automotive industry, because they ensure quality, performance and easy maintenance with remarkable cost efficiency
About 700 specialists from 30 countries are participating in GFC to being held from September 12-14, 2018. The event will have over 100 lectures that will ponder over the situation in the evolving fibre world, with particular emphasis on the topics of the circular economy and sustainability. Participants will also have the opportunity to explore special areas of application more in depth, for instance, the automotive sector.
The third edition of Centrestage held in Hong Kong from September 5 to 8 attracted 8,700 buyers, a 2.4 per cent increase since last edition. The tradeshow, attracted buyers from over 80 countries including Canada, France, Germany, India, Korea, Russia, Taiwan and the United Arab Emirates increasing in numbers significantly. Centrestage is one of Asia’s largest apparel and accessories tradeshows.
Buyers from Asia accounted for 35 per cent. This year's Centrestage attracted many global brands and buyers. An increased number of overseas buyers came looking for business opportunities and talents, which solidified Hong Kong’s position as Asia’s fashion capital. Three thematic zones showcased 230 brands from 22 countries and regions. The event also presented some 40 activities over its four-days, including more than 20 fashion shows.
Japanese street wear label Facetasm, Hong Kong women’s wear label Idism and Chinese luxury label Ms Min presented their latest 2019 spring/summer collections. Moreover, 13 new designer brands showed their 2019 spring/summer collections. Other collections were also showcased by local established brands including Dorian Ho, Artistic Palace, Harrison Wong, House of V, and Loom Loop. The industry is cautiously optimistic about sales in the coming year.
Centrestage was organised by the Hong Kong Trade Development Council.
The textile industry in Pakistan suffers due to lack of basic working capital. The industry wants a policy for clearing pending refund claims within a stipulated period. At one time, authorized dealers could send advance payments up to $10,000 per invoice for import of all eligible items without the requirement of letter of credit or bank guarantee to suppliers aboard.
This facility has been withdrawn and this has affected export-oriented industries, creating hurdles in meeting on-time export commitments while increasing the cost of doing business. The value-added garment sector has grown 11.22 per cent in 2017-18 despite internal and external challenges. The value-added garment sector is a major tax payer, the largest employment generator in the whole textile chain and exports worth $5.5 billion.
One suggestion is a one window operation could replace the lengthy procedure that involves interaction of manufacturers with various agencies. Another is social security and all other taxes should be merged and deducted at source. The feeling is the exchequer will receive more revenue if a reasonable percentage of realized amount is deducted. Also many small and medium enterprises will be added in the tax net automatically.
During the 2017-18 season, cotton acreage in Punjab stood at 2.91 lakh hectares as against the initial figures of 3.82 lakh hectares. However, higher productivity saw the state produce 11.5 lakh bales. Cotton is sown over nearly 110 lakh hectares across India.
Rates of raw cotton opened strong in most markets in Punjab as harvest of the state’s second biggest kharif crop started in the first week of September. Farmers are getting about Rs 5800 per quintal for their produce.
The strong market is expected to continue for about two months. The MSP of medium staple cotton, grown in Punjab, is fixed at Rs 5,350 per quintal this year, up from Rs 4,220 per quintal in the last kharif marketing season. Higher rates for the produce are likely to give better returns to farmers. A higher yield of crop is expected this season as compared to 2017-18. The buoyancy in rates is expected to remain at least till Diwali or till the arrival of raw cotton picks up in markets across India.
Farmers in Bathinda expect a good yield of over nine quintal per acre, which earlier was nearly eight quintal per acre. The price too is expected to remain good.
The textile sector is the largest employer of industrial labor in Pakistan and accounts for over 60 per cent of the country’s exports. In the backdrop of a competitive regional landscape, with countries like Bangladesh and Vietnam having emerged as sizeable players on the global stage, Pakistan has to invest in the entire value chain of the textile sector on a priority basis, including innovative solutions for enhancing cotton yields.
Backward linkages where large industrial players integrate into corporate farming for cotton could be a potential model to explore in this regard. Another key area of focus is checking undocumented imports of textile and apparel products from China. Undocumented or under-valued imports of such products distort the local market dynamics making it impossible for local players across the whole value chain to compete.
Companies in textile and apparel segment say they are willing to make further investments if they receive the right support, including simplification of cumbersome processes and procedures through effective one-window facilitation. Exploring linkages with China, especially with the industry on China’s west coast that is closer to Pakistan in terms of physical distance, in the form of contract manufacturing of garments, could be a profitable venture. This strategy could be very important given the context of rising domestic consumption in China.
Lectra, the technological partner for companies using fabrics and leather, has launched its latest PLM solution, Lectra Fashion PLM 4.0. Boasting of several new features and tools, Lectra helps fashion companies to work in a smarter and more agile manner in an IT-friendly environment.
The latest PLM solution - Lectra Fashion PLM 4.0, has Lectra Easy Connect, a series of pre-configured connectors that allow the solution to interface with other IT systems such as ERP and CRM. These connectors ensure data integrity by facilitating a smooth and consistent flow of data between internal and external supply chain actors. Lectra has also enhanced connection to the design process by strengthening Adobe Illustrator integration via a new plug-in. It has enhanced the user experience by making its PLM solution highly configurable.
A star feature is Lectra Easy Configure, a tool that allows users to manage and organise data according to their own profile, company organisation and data structure to ensure easy and round-the-clock access. This enables companies to become more agile, as users can access and analyse their data whenever they need to, quickly and without technical hiccups. Lectra Fashion PLM 4.0 streamlines day-to-day activities via an updated interface with new search and notification functions, and a dynamic and configurable portfolio view that allows users to monitor and direct collections with the help of dynamic data display.
In its endeavor to become truly circular by 2030, H&M has opened a hydrothermal textile recycling plant in Hong Kong. The recycling method involves using heat, water and a blend of biodegradable chemicals to separate cotton and polyester from mixed fabrics. Once the fibers are separated, they can be sorted for reuse in new garments, including jeans.
The technology aims at overcoming the problem of recycling hard-to-recycle textile blends, which are the most widely-used fabrics globally. While the plant will initially be used by H&M only, the retailer will license the technology, so it can be used by other fashion manufacturers.
This method, which H&M calls garment-to-garment recycling, is expected to prevent the potential for chemical pollution finding its way into the environment while minimising carbon emissions and costs.
Alongside the garment-to-garment plant, H&M is showcasing a miniaturised version of the recycling technology at a pop-up H&M store in Hong Kong in a bid to educate customers about the importance of recycling. Customers are being encouraged to bring their unwanted or end-of-life clothing to the temporary store, where they will have the chance to see the technology first-hand.
The belief is when customers see with their own eyes what a valuable resource garments at the end of life can be, they can also believe in recycling and recognise the difference their actions can make.
