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Asian Textile Conference (ATEXCON), the flagship event of Confederation of Indian Textile Industry (CITI), was held in Mumbai. The theme of the was: ‘Textile industry: moving beyond the conventional paradigms’. The event brought together leading players of Asian textile industry, global input suppliers and service providers to deliberate upon key areas of business, including regional as well as global issues concerning this sector. The conference also focussed on emerging opportunities through cross-country co-operation. Participants benefitted through direct interactions with government officials, industry, mill owners, potential customers of machinery, etc.
The event started with a welcome address by Sanjay Kumar Jain, Chairman, CITI and a special address by Sanjay Jayavarthanavelu, MD, LMW. The inaugural session also saw the release of 9th ATEXCON Knowledge Paper. The theme presentation was given by Prashant Agarwal, Joint Managing Director, Wazir Advisors who in his speech stressed on the points which India can follow not only to be competitive and remain relevant but to be a leader in the global textile space. He said India holds an edge over other markets owing to its domestic market and all we need to do is to focus on technology and automation and having a large scale and quality-oriented production to capture the international market.
“Consumption trends are something, which are driving the domestic market. Now when we talk about 2025 target, we are 122-billion-dollar industry, $37 billon is our export, $85 billion is our domestic market. And if our export grows by nice per cent CAGR, achieving the target is not a herculean task. As far as domestic market is concerned, if it grows by 11 per cent CAGR, the target of 220 billion dollar is not difficult to achieve by 2025. So, when we talk about $300 billion target, we really have to focus on our industry,” he said.
The presentation was followed by inaugural address by textile commissioner Kavita Gupta. She talked about policy initiatives taken by the government for the welfare of the industry. “We are doing everything what it takes to strengthen the textile sector. Keeping power issues in mind, we have introduced solar driven powerlooms, which are available on highly subsidised rates. Upgradation is happening in the industry on every level. Technical textile is another where we are focussing diligently. Clusterwise development has been planned for this segment. It’s highly profitable area of textile and we are promoting it on a pan-India basis,” she said. Vote of Thanks was given by T RajKumar, deputy chairman, CITI.
Pathbreaking sessions
The first session was based on the theme ‘Policy support to achieve $300 billion market’, attended by textile commissioner Kavita Gupta, Sanjay K Jain, Chairman, CITI, DR P Alli Rani, Chairman and MD, CCI, Ujjawal Lahoti, Chairman, TEXPROCIL, Narain Aggarwal, Chairman, SRTEPC among otheres. The panellists deliberated on current policy support available to the industry, issues being faced by the industry, post-GST trade scenario and strategies for inclusive growth, policy perspectives for an integrated textiles industry and policy support required to achieve the target exports. The session was moderated by Jain.
The following session, ‘Innovations and technological developments shaping the future of textile manufacturing’ was about new product developments, technologies and India’s competitiveness in the global market. The third session ‘Global value chain – trade and investment perspectives’, saw the discussion on topics such as importance of regional economic integration in textile industry, leveraging the benefits of trade agreements, trade & investment perspectives and key challenges faced by the textile industry on the international front. The lead presentation was by Christian Schindler, Director General, ITMF-Zurich. Opening remarks were by Prem Malik, past chairman, CITI.
Focus on domestic markets
The fourth and the last session saw the presence of DL Sharma, Prashant Agarwal, Rahul Mehta, President (CMAI), Mohit Dhanjal, Director-Retail, Raymond; Anindya Ray, EVP & CSO, Arvind Lifestyle; Alok Banerjee, CEO, Retail, Bombay Dyeing. The panellists discussed present structure of retail sector in Asia, emerging trends and opportunities in retailing sector and strategies being adopted to collaborate textile manufacturing with the changing retail scenario. Mehta made some valid points when he said not much has changed since last years in the relationship that a manufacturer and retailer share with each other. The industry is still going by the rules, which hold limitations, especially when it comes to the domestic market. “Domestic market is something, which saved the day during the times of global recession and the need of the hour is to really focus on this particular space. There is a limitless growth in the domestic market if it is exploited well with innovative strategies in manufacturing and retailing areas,” he emphasised.
Vietnam’s textile industry began in 1958 in the Northern region and in 1970 in the Southern region. Today, there are about 6,000 textile and apparel manufacturing companies working with 2.5 million employees while the population in Vietnam is about 90 million. In 2016, Vietnam is recognised as the third top garment exporter in the world after China and Bangladesh. Apparel exports account for 16 per cent of the country’s total exports (2017). Apparel and textile products are exported to 180 countries around the world. Garment manufacturing accounts for 70 per cent of the total businesses in Vietnam with CMT (cut, make, trim) being the main method (85 per cent) of export. Main market for Vietnam textile and garment products are US, Europe, Japan and South Korea.
Vietnam’s textile and garment industry excelled its 2017 target of $30bn with an export turnover of over $31bn, an increase of 10.23 per cent on the prior year afte an increase of 10.23 per cent on the prior year after having circumvent pressures from the TPP deal call off. Major markets maintained good growth, while there were breakthroughs in exports to other markets such as China, Russia and Cambodia, according to Le Tien Truong, deputy chair, Vietnam Textile & Apparel Association (Vinatas).
Domestic market
Vietnam’s retail sales are growing at 20 per cent annually, and spending on apparel is the second highest category in Vietnam. According to Vietnam Textile & Apparel Association, the domestic textile and garment market has grown year-on-year at 10 per cent in 2017. ‘Textiles Intelligence’ recent report has made strong prediction about the country’s textile production capacity which is expected to grow 12-14 per cent per annum from 2016-20. The export potential is also expected to grow 15 per cent per annum during this period, and Vietnamese textile and apparel industry will reach $50 billion by 2020. Le Tien Truong feels the balance in development of the domestic market and the foreign market has been an important point for the local textile and garment industry to ensure jobs for the employees and to maintain development of the enterprises.
Challenges on the way
As per research by the Ministry of Labor, every $1 billion of export value generated from Vietnam’s textile and apparel industry can create an additional 250,000 jobs, moreover, the textile labour cost in Vietnam is still relatively low compared to many other countries in the region. In 2016, the minimum wage of garment manufacturing industry in Vietnam was about $108 per month. The advantage of the lower labour cost has resulted in lower production cost, thus being price competitive in the global market, which helps Vietnam to attract global attention in apparel sector. Growing prices of electricity and transportation, along with an increase in minimum wages are a concern for the industry.
Most manufacturers don’t have own brands rather they produce for foreign brands as outsourcing partners, which involves huge global risks. Since big brands give priority to established manufacturers, which makes it tough for new entrants especially small-scale enterprises. On the other hand, Vietnam’s garment industry is highly dependent on imports for its machinery equipment, raw materials, and accessories, which greatly impact their profit margins.
Plausible solutions
The government has started investing heavily in the development of ancillary industries in Vietnam. Vietnam has emerged the second biggest investor in development of shuttleless looms and the biggest investor in ring spindles and open-end rotors, in ASEAN. It has registered expansion in its knitting sector. A cotton manufacturing plant, known as ‘Rang Dong Industrial Park’ at a size of 1,500 hectares and worth $400 million has been established in Vietnam’s Ninh Thuan province, with production value of $3 billion on an annual basis. Government has also given apparel manufacturers opportunities to enhance their value-adding capabilities, develop their own brands, become original design manufacturers (ODMs) rather than function only as subcontractors, etc. According to experts, if Vietnamese enterprises make input materials, their products would be able to replace Chinese products and can compete with Chinese products in price.
FDI inflow
The first 11 months of calendar year 2017 witnessed a steep 11.9 per cent rise in FDI compared to the previous year. Vietnam received $16 billion in FDI and its increasing rapidly, making one of the most popular destinations in Asia for textile investment. As per Vietnam’s Foreign Investment Agency (FIA), FDI investments were up 152.78 per cent year-on-year in the first two months of 2017, and investment in Vietnam’s textile and apparel industry now accounts for 21 per cent of the country’s total FDI.
Nike brand President Trevor Edwards has resigned and will retire in August. The Wall Street Journal, citing an internal memo, reported Nike had received reports of behavior occurring within the organization that do not reflect our core values of inclusivity, respect and empowerment.
Due to conduct inconsistent with Nike’s core values and against code of conduct, there have been no direct allegations of misconduct against Edwards. Edwards will now serve as an adviser to Nike Chief Executive Officer Mark Parker until his retirement. Elliott Hill, the former president of Nike Geographies, will take on the new role of president of consumer and marketplace, says Nike.
Nike further added that Parker will remain chief executive and chairman beyond 2020. The moves come nearly a year after Nike made several changes to its leadership structure and streamlined its business segments to four from six. It also eliminated a quarter of its shoe styles and cut 2 percent of its workforce.
According to the sources in the memo, Nike was conducting a review of the company’s human-resources systems and practices for elevating internal complaints.
Bangladesh may be affected by the US’ decision to impose tariffs on apparel imports. After imposing tariffs on imports of a number of products from different countries, the world’s biggest economy is now planning to impose tariffs on imports of apparels, footwear, and technology and telecommunication from China.
A tariff imposition on readymade garment items would hurt Bangladesh’s exports to the US market if the tariff were to be imposed indiscriminately on all countries. The impact of possible tariff on apparel products from Bangladesh would depend on how the US imposes it. Bangladesh’s exports will be affected if the tariff is imposed on all countries. If the tariff is imposed only on China and other big countries, Bangladesh may benefit.
The imposition of a tariff by the US would be a matter of concern for Bangladeshi apparel exporters as they are currently paying around 16 per cent duty in the market. The US has already imposed additional tariffs on different products from Canada, the European Union and Japan. These countries have warned the US of retaliation through imposing tariffs on US products. The EU has threatened to slap tariffs on products like Harley-Davidsons, Kentucky bourbon and jeans if the US doesn’t exempt the bloc from tariffs on steel and aluminium imports.
A strong euro has taken a toll of Spanish retailer Inditex this quarter leading to lower profit margins. Gross margin dropped to 53.5 per cent in the quarter to the end of January from 59.4 per cent in the previous quarter and 54.8 per cent a year earlier.
Sales at constant exchange rates rose 10 per cent in 2017. Spain-based Inditex, the owner of Zara, is the world’s biggest fashion retailer by market value. Inditex is more affected by the strengthening euro than many European rivals because it sources a higher proportion of garments closer to home rather than from, say, Asian markets.
The Spanish company has invested in technology to merge online and store experiences. Radio-frequency identification tags on clothing keep a tight control on inventory, allowing mobile phone apps to notify customers if certain items are available at nearby stores.
The Zara app constantly refreshes its magazine-like appearance with new designs photographed on models at the company's headquarters at a rate of 120 campaigns per season. Sales grew nine per cent in the first five weeks of the new financial year as new spring collections hit shop floors with items like printed maxi dresses, linen separates and pastel blazers at Zara.
India’s silk imports have fallen drastically over the last four years. The country hopes to reduce its dependence on China for the import of high quality silk and become self-sufficient in silk production by 2022. The decrease in import volumes has been primarily on the back of an increase in production of bivoltine silk. While the total production of raw silk has recorded an annual growth rate of around five per cent that of bivoltine silk which is superior quality silk has grown by 13 per cent.
Bivoltine silk production is likely to touch 6,200 tons in 2017-18. India has allocated close to Rs 2000 crores for a period of three years for undertaking development activities for silk. A portion of the funds would be utilised for production of high quality silk.
However, India’s silk exports too have declined in value terms due to muted demand from key importing countries, including Europe and the US, and inability to compete with Chinese prices and quality. This has made the industry look at other geographies like Egypt, Latin America, Australia and New Zealand. Silk exports include natural silk yarn, fabrics and made-ups, readymade garments, silk carpets and silk waste. India’s production of raw silk is expected to touch 45,000 tons in 2022.
In 2017, Picanol’s turnover increased eight per cent compared to 2016. The group closed 2017 with a net profit of €101.71 million compared to €119.72 million in 2016. In 2017, the weaving machines division experienced a record breaking year. Rising demand for quality and technology resulted in strong sales – mainly in Asia – and this led to further market share growth in many countries and weaving market segments. This resulted in Picanol’s putting a record number of weaving machines on the market in 2017. Sales of spare parts and accessories followed the positive trend of the weaving machines.
The industries division also showed a strong sales growth in various market segments while making an increasing contribution to the group’s turnover. On the other hand, rising material prices and a higher share of subcontracting versus own production had an adverse effect on the result.
For the first six months of 2018, the order book is well-filled. For the first half of 2018, Picanol expects to realize a turnover in line with that of the first half of 2017, but is taking into account a further negative impact of rising commodity prices.
Intex South Asia will be held November 14 to 16, Sri Lanka. This is the biggest international apparel textile sourcing show for yarns, apparel fabrics, denim fabrics, clothing accessories and allied services in the South Asia region. It connects the entire manufacturing and supply chain and brings together the best manufacturers of apparel and textile products and clothing accessories coupled with serious buyers from across South Asia and the rest of the world.
The event strengthens intra-regional trade helping manufacturers and buyers take advantage of opportunities developing in the South Asia region by combining their strengths and joining hands to create stronger business ties under one trading platform. Seminars and interactive business forums deliver high quality market intelligence to support industry efforts to upgrade, move up the value chain, better understand intra-regional trade, leverage better FX practices and help manufacturers gain a competitive edge.
Intex South Asia has attracted top global companies to Sri Lanka. WGSN and Woolmark made their Sri Lanka debuts at Intex South Asia. In 2017, exhibitors from India, Pakistan, Sri Lanka, Bangladesh, China, Korea, Taiwan, Hong Kong, Thailand, Indonesia, Singapore, Switzerland, Turkey, Australia and US exhibited top quality products. Intex South Asia 2017 saw 46 per cent exhibitor and 67 per cent international buyer growth.
Italian textile machinery manufacturers will be present at Indo Intertex, Indonesia from April 4 to 7. The textile industry is a major driving force for Indonesia’s national economy. In recent years, the country has supported a widespread modernisation program of existing technology, allowing for increased exports in the garment industry, and making Indonesia the eighth largest exporter in this sector worldwide.
Over the course of the past few years, Indonesia has represented one of the primary markets in Asia for Italy’s machinery manufacturers. There was a 19 per cent increase in Italian machinery sold over the first nine months of 2017 compared to the same period for 2016.
Italy’s participation at Indo Intertex is part of an intensive program of trade initiatives aimed at promoting the Italian textile machinery industry in Indonesia. A total of 13 Italian textile machinery manufacturers will be present at Indo Intertex. Among the companies are Bonino, Busi, Caipo, Cognetex, Red Carpet, Santex Rimar, Sei Laser, Sicam, Ugolini.
Indo Intertex is a trade fair for the textile and clothing industry where machines for processing of textiles and related equipment including materials and raw materials will be exhibited. The latest materials, fabrics and garment accessories are introduced to Indonesian producers.
India’s footwear shipments to the US have fallen eight per cent in a year. Brazil’s footwear shipments to the US were down 13.8 per cent year on year. In 2017, the US’ imports of shoes fell 0.4 per cent from 2016.
While China remains overwhelmingly the dominant supplier, still commanding a more than 71 per cent share of US footwear imports, footwear imports from China fell 4.3 per cent in 2017 from 2016. Vietnam has a 17 per cent share of US footwear imports.
Indonesia is the third largest supplier of footwear for the US market. Its shipments last year saw a 3.62 per cent year-over-year gain. The country now holds a four per cent share of the market. In value terms, Italy, India, Mexico, Cambodia, Spain, the Dominican Republic and Brazil are among the top ten suppliers of footwear to the US. In terms of volume, China, Vietnam, Indonesia and Cambodia hold the top four spots.
Cambodia accounts for a 1.2 per cent share of overall US footwear imports. By value, footwear imports from Cambodia were up 6.8 per cent over 2016. Footwear shipments from Thailand also were up 21.2 per cent last year. For other footwear-making nations, costs drove up competition and ultimately lowered their shipments.
