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A free trade agreement is being negotiated between the European Union and Vietnam. The FTA may be completed before the end of the year. But European retail clothing brands want duties on apparel to be eliminated. They also want more flexible rules of origin.

The European Branded Clothing Alliance (EBCA) says the EU-Vietnam FTA is a priority and is welcome but it looks forward to a global trade policy environment which eases the operation of its supply chains. To be able to benefit from new preferential tariffs, EBCA says its member companies require a more flexible approach from the EU on rules of origin for apparel, reflecting the global value chains it operates. Since Vietnam has limited fabric production available to international brands, EBCA says this could severely restrict its ability to benefit from reduced tariffs if the current model for rules of origin is maintained.

The group also wants to see the FTA address non-tariff barriers that hinder European retailers setting up operations in Vietnam, such as cumbersome economic assessment tests and quality testing on apparel consignments.

The European Branded Clothing Alliance represents around 60 brands with a major European presence - including Inditex, H&M, Levi Strauss, Gap, Nike and VF Corporation.

www.ebca-europe.org/

Bangladesh's exports to China made a quantum leap in the last fiscal year. Over the last four years, the volume of exports to the Chinese market increased more than four times. Export earnings from China in July of fiscal 2014-15 grew by 53.88 per cent compared to the corresponding period.

Items Bangladesh exports to China include readymade garments and textiles, fish and crabs, leather and leather goods, jute and jute-yarn and plastic waste. Apparel constitutes a third of the exports. China is gradually drifting away from basic readymade garment items because of the high cost and switching over to high-tech industries. This has given Bangladesh a big scope to grab the market. Also China gives Bangladesh zero-tariff access.

Currently, Bangladesh as a least-developed country  gets duty-and quota-free access for 4,788 products to the Chinese market. The trading list accounts for 67 per cent of the country's export basket. Chinese investors are coming to Bangladesh to explore export possibilities. Bangladesh's apparel exports could triple by 2020 as European and US buyers also plan to strengthen their presence in the country. Bangladesh considers China as important a market as Japan and Russia and is aiming to push up exports to China to a billion dollars within a couple of years.

Bangladeshi garment manufacturers remain on track to expand their exports this year. Competitive prices have kept demand from western customers high. The country has targeted $26.9 billion in garment exports for fiscal 2014-15. Bangladesh’s exports of garment products were 13.86 per cent higher than in the previous fiscal despite a prolonged political crisis and two major industrial disasters.

But exports of woven garment declined by 4.14 per cent in July and knitwear export grew only by 4.32 per cent. Also, garment exports grew a tepid 0.1 per cent last month from a year earlier, the smallest increase in 23 months.

Export growth will remain low up to September due to the after-effects of last year's political crisis. Also retailers seem to be looking for alternative destinations. Among other problems, the steep appreciation of the local currency against the dollar is another woe for the garment sector now.

Retailers are still with Bangladesh, but the country needs to complete the unfinished work like relocation of factories and following compliances set by retailers. The government and garment makers also need to look at the small and medium factories, so that the garment sector performs well. Otherwise the outlook for Bangladeshi apparel exports this year continues to drive demand across the global cotton and textile supply chain in 2014-’15.

The 4th Cambodian International Textile and Garment Industry Exhibition, and the concurrently held 4th Cambodian International Machinery Industrial Fair, are together billed as the largest industrial event in the country with 260 exhibitors from 21 countries. However, domestic players, despite the garment sector accounting for 80 per cent of exports, had a very small representation during the exhibition.

 

But for suppliers currently exhibiting their wares at a trade show this weekend on Phnom Penh’s Koh Pich island, Cambodia’s garment industry represents a tiny fraction of their total sales. Though Cambodia accounts for roughly four percent of the global garment industry, a number of the exhibitors were uncertain about the country’s investment environment.

 

While the companies interested in sourcing from Cambodia are keen to increase their investments in the country, they seek able support from the Cambodian government. The 500 odd factories, mainly supplying to export markets are producing low quality goods but importers are not always bothered about the labour cost but want a quality product too, so they continue to depend upon China instead of exploring opportunities in Cambodia.

The exports of garments and textiles from Cambodia grew by 8.98 per cent to $1.173 billion in January-March 2014, compared to exports of $1.076 billion made during the same period last year, according to the consolidated data released by the GMAC.

www.camboexpo.com

The textile industry in UAE is huge. It exports to more than 50 countries in Africa, the Middle East, South Asia and Europe. Homegrown luxury brands are in high demand from brand-conscious male consumers with a high purchasing power. But more aggressive marketing programs are needed to promote the country as a high quality clothes producer and incentivize key players in the industry.

The UAE textile industry has a diversified product portfolio. Some of the textiles produced in the country are car seats, tents and curtains, in addition to clothes. Knitted fabric is the most in demand in the UAE followed by woven fabrics. The UAE apparel industry has transformed from conventional outlets to large shopping malls and organized retail chains. Apparel brands are very strong due to their presence in premium shopping malls.

The industry foresees good profitability in import of textiles and textile articles and making garments and then re-exporting them. Bulk imports of textile and textile articles are from China and India. The cost of manufacturing is significantly lower in these countries due to the availability of cheaper labor and lower input costs.

Textile and garment companies in the UAE have improved and upgraded their raw material storage, packing and transport facilities for large-scale operations.

The recent Intertextile Pavilion at the Shenzhen International Trade Fair for Apparel Fabrics and Accessories a new record of buyer attendance, with this result confirming the growing potential in the Southern China textiles market. Over 17,500 buyers from 27 countries attended the fair, a 34 percent increase from 2013. The event saw the participation of nearly 700 exhibitors from eight countries, a 12.7 per cent rise compared to last year’s edition.

The fair took place from July 10 to 12 at the Shenzhen Convention & Exhibition Center and covering 30,000 sq. mt. space which is 33 per cent more than 2013. Exhibitors in the country and regional pavilions in particular experienced positive results. For instance, Organisers of the Korea Pavilion, the Korea Fashion Textile

Association (KFTA) witnessed greater demand from buyers in Southern China. Korean exhibitor, the Korea Textile Center, who has participated at the fair for five years now, also confirmed the opportunities in the south of China.

The potential of the yarn market in this region continued to attract exhibitors, especially those from India. According to The Cotton Textiles Export Promotion Council (TEXPROCIL), organisers of the India Pavilion, Indian companies are filling a big demand for yarn in the south and east of China, and hope to develop these opportunities further through the fair.

As the fair establishes itself in the region, and given its close proximity to Hong Kong and Guangzhou, a number of leading international companies choose to source fabrics there. Some of the big brands that attended the fair this year included Brooks Brothers, Diesel, Esprit, G2000, Givenchy, LF Sourcing, Liebeskind, Pepe Jeans, Replay and Silvereed, among many others.

The next Intertextile Pavilion Shenzhen will take place in mid-July, 2015 at the Shenzhen Convention & Exhibition Center again. The next Messe Frankfurt apparel fabrics and accessories fair in China is Intertextile Shanghai Apparel Fabrics – Autumn Edition 2014 which will be held in Shanghai from 20 to 23 October, 2014.

 

www.intertextileapparel.com

Finland is developing methods for handling textile waste. The practice of dumping textile waste at landfill sites will be brought to an end by January 2016. Large-scale solutions to the problem are already being developed. Fabric as good as or better than the original can be obtained by using solvents to break down worn-out and even heavily soiled textiles.

Although reuse of textiles and mechanised recycling methods ease the burden on the environment, the textile mass also includes material in poor condition or heavily soiled, limiting the opportunities for recycling. The new methods multiply the utilisation possibilities.

Scientists are developing methods for restoring worn-out fiber to pristine condition. They are working on methods for separating the cellulose molecules contained in textile waste, such as cotton, using efficient and environmentally friendly solvents.

Even the molecules of old and worn fiber qualify for reuse. The fibrous components of worn fabric can be separated and returned to textile production as raw material. The end result can be a product of equivalent quality to the original or even better.

Methods are being developed for recycling, decoloring, bleaching and dissolving  textiles. Textiles are fed into the process both intact and as loose scraps. Color is then removed and the solubility of the cellulose increased. After the application of solvents and removal in solution, the recovered cellulose is then spun into fiber. The remaining fibrous material is normally polyester, which can be melted down and used in the preparation of fibers and composites.

Hong Kong-listed yarn and garment fabric manufacturer the Texhong Textile Group saw a fall in profits for the first half of the year due to weak yarn sales prices in mainland China market and the depreciation of the yuan against the US dollar. It has a subsidiary unit in India. The profit attributable to shareholders  declined by 72 per cent year-on-year for the six months ended June 30 this year.

The company’s gross profit margin dropped by 8.2 percentage points to 13.2 per cent while its net profit margin is also down 9.7 percentage points to 2.7 per cent. Its strategy would be to gradually increase the proportion of synthetic fiber yarn sales and reduce the impact of fluctuation in cotton price on the group’s financial performance.

The depreciation of the yuan against the dollar would continue to affect its business, as a significant amount of the company’s sales revenue is denominated in yuan, while certain costs and liabilities are denominated in dollars. The company’s revenue from external customers rose by 26.5 per cent thanks to higher yarn sales volume in the first half of this year. Mainland China was the major source of the company’s revenue followed by Macau.

www.texhong.com/home/home.htm?languageno=en

Bangladesh garment exports fell in July compared to a year earlier. This is mainly due to the political crises and the industrial disasters last year, which dented the confidence of international retailers.

In the first month of the current fiscal, export of woven items declined by 4.14 per cent compared with the same month last year. In August 2012, exports of woven items declined by 12 per cent and knitwear products by 24 per cent. Bangladesh’s garment industry performed well even in the global financial crisis in 2007 and 2008 with higher exports of basic garment items worldwide.

Garment exports were badly hampered in October, November, December 2013 and January 2014. Along with massive disasters in the sector, production cost increased by nearly 15 per cent with the appreciation of local currency against the dollar. Another cause of concern for the Bangladeshi garment sector is the higher bank interest rate, which has been eating up the marginal profit of garment makers. And in some cases buyers bargain for squeezing prices further.

In July 2014, overall export earnings went down by 1.37 per cent and were 2.03 per cent less than the target. Other problems are the inadequate supply of gas and power in industrial units and the poor condition of the Dhaka-Chittagong highway.

Indonesia wants to reduce its dependence on imports of raw materials for its garments industry. Therefore, it plans to impose a filament yarn anti dumping duty (KADI). The idea is to import substitute local products as raw materials. At present nearly 50 per cent of the capital goods and raw materials in the country are imported. The focus will be on integrating the upstream and downstream textile sectors.

Indonesia has a comparative advantage for labor-intensive industries and a sizable domestic market. The geographical distribution of the Indonesian textile industry is concentrated on the island of Java. Almost 90 per cent of the textile industry is located in Java.

The imposition of anti-dumping duty is aimed at companies which dumped cheap goods. Another aim is to create fair competition in the domestic market. The imposition of anti-dumping duty on three types of filament yarn is expected to reduce imports, so that the country can maintain its balance of trade, especially in the manufacturing sector.

Currently, Indonesia is ranked 12th in the world in textile exports, with approximately 1.6 per cent of the world market share. Since 2008, due to the global economic downturn, the number of factories, exports and production declined, however, in 2011, there has been a gradual reversal of the trend.

The most popular export items from 2007-2011 were woven clothing, underwear and knitted or crocheted clothing which together made up nearly 60 per cent of the total value of textile exports over this period.

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