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With the arrival of foreign fashion brands, analysts say Vietnam’s fashion industry is floundering. Many fashion brands have come to Vietnam, resulting in ‘fast fashion’ trend among Vietnamese youth. In early September, the Swedish brand H&M opened its shop in HCMC. Earlier, Zara opened one outlet in Hanoi and another in HCMC. Zara’s first shop in HCMC reported revenue of VND5.5 billion on the opening day, the highest among Zara’s shops overseas.
The success of Zara in Vietnam has prompted Inditex, the group which owns Zara Bershka, Stradivarius, Massimo Dutti and Oysho, to bringing other brands to Vietnam. Reports say that Stripe International from Japan is going to take over Vietnamese NEM. Nguyen Tiep, PR Director of NEM, confirmed the two sides are negotiating Stripe’s capital contributions. Vietnam began seeing a tsunami of foreign brands since early 2015, when tariff was cut. There are around 200 foreign fashion brands in Vietnam. The huge influx of foreign brands shows the country is an attractive market. According to Vinatex, the domestic garment market is valued at $4.5 billion and has a growth at 20 per cent per annum. Vietnamese spend VND100 trillion on clothes each year. A Nielsen report reveals clothing is the third priority item among Vietnamese, post food and savings.
Despite the fact that the market is huge and promising, domestic fashion brands are facing problems. Well-known brands such as Ninomaxx, Blue Exchange, Viet Thy, Foci, Sifa, PT 2000, Sea Collection and Dan Chau, which had hundreds of shops, have reduced their network. In 2013, Ninomaxx, which felt the impact of foreign companies, decided to change its shop model into a one-stop shop Ninomaxx Concept and restructured the company. Ninomaxx’s Chair Nguyen Huu Phung says the company had to carry out reform on products, distribution, customer service and labour. The brand is currently down to 60 shops as against 200 earlier.
VF Corporation and North Carolina State University recently announced a collaborative, strategic partnership in support of student development at NC State University and advance apparel and textiles innovation within VF. Steve Rendle, Chairman, President and CEO, VF exults, “VF is proud to partner with NC State University, one of the world’s top Universities and home to the only College in the US devoted entirely to textiles. Through our shared expertise in research and consumer insights, we aim to stimulate apparel innovation while also developing a consistent pipeline of exceptional leaders for our company.”
The College of Textiles and VF have a long-standing relationship. Under this new multi-year agreement, the partnership is further bonded by NC State’s Poole College of Management, which brings particular expertise in business analytics and supply chain management.
The partnership will: offer a variety of undergraduate and graduate education and training activities for students in the colleges, including internships, student projects and competitions; facilitate industry-leading research that will elevate apparel and textile products and experiences; provide executive education opportunities for VF associates; and establish a VF presence on Centennial Campus, NC State’s nationally recognised research campus
David Hinks, Dean at the College of Textiles was also happy with this arrangement, “With many College of Textiles alumni working and thriving at VF, we could not be more pleased to be building on our partnership. The addition of VF on campus and the ability of students and faculty from both the College of Textiles and Poole College of Management to work shoulder-to-shoulder with VF personnel will bring new avenues to advance textiles, apparel and footwear.”
The Turkish Ministry of Environment and Urbanisation has introduced the country’s ecolabel certification which will be applicable to textiles manufactured in Turkey. The legislation is being introduced to encourage energy efficiency, waste minimisation and sustainable production. Its said to have been aligned with the existing EU ecolabelling legislation. Two textile companies from the country have been granted the ecolabel certification as the new system of classification has been launched at a ceremony in Ankara.
The ecolabel system will examine all stages of a company’s production processes, including selection and procurement of raw materials. The EU Ecolabel for clothing, bed linen and indoor textiles is a voluntary eco-labelling scheme from the European Commission which encouraging the use of sustainable practices in textile manufacturing. Every product and service placed on the market in the European Economic Area – the EU, including Iceland, Lichtenstein and Norway – that meets EUs Ecolabel criteria for that product/service would be certified with the EU Ecolabel.
A competition was held to decide on a logo for the Turkish ecolabel project, with the final design being chosen from 85 submissions.
The textiles industry, has been struggling due to increasing competition from neighbouring countries like Bangladesh, Indonesia and Vietnam, along with rising imports and sundry problems such as GST. Now, experts say due to these factors, the hope of achieving its total export target of $45 billion in the current fiscal is difficult. Sanjay Kumar Jain, Chairman, Confederation of Indian Textile Industry (CITI) evaluated, exports were down in October, November and December. If the trend continues, the projected textile export target of $45 billion in the current fiscal will be unachievable. The industry may even find it difficult to attain last fiscal’s export of $40 billion. While rupee appreciation is one major factor, another looming threat is a further rise in cotton prices, which has gone up from Rs 37,500 a candy in November to Rs 41,500 now. Given the fluctuation in both rupee and cotton prices, exporters are unable to take orders or fix any price point to do jobs. Textile exports from India, include ready-made and knitwear garments, cotton yarn, fabrics, made-ups, handicraft items, man-made yarns, fabrics and jute products.
One year post the use of RFID marker chips to track and identify fur garments within Russia and neighbouring Belarus, the initiative is a great success. So, the scheme is now likely to be extended to cover the movement of fur products within the other three member states of the Eurasian Economic Union – Armenia, Kyrgyzstan and Kazakhstan.
Since January 2017, all new fur garments within Russia and Belarus came fitted with a irremovable Radio Frequency Identification (RFID) chip, which was designed to curb the extensive practice of illicitly importing such items to avoid paying duty. The success of the scheme was reflected in the exponential rise in declared volume of imported fur items.
The total number of declared garments rose from 1,07,000 in 2016 to 1,76,000 in 2017. In the case of headwear, the increase was even more dramatic, with the number of such items declared rising from 1,21,000 to 3,46,000. Taken together, this amounted to a 65 per cent growth in the number of declared items across the two countries and the two categories.
Inevitably, this has led to the overall value ascribed to the fur trade in these two markets being substantially upgraded. On the logistics side, given that locally-produced items are also tagged, it has been seen that the system is well suited to keep track of around four million individual units.
Following the success of the scheme, the system was extended to Kazakhstan in December last year, with Armenia set to be similarly enrolled before the end of this month. Under the terms of an agreement signed by all EEU members, Kyrgyzstan is obliged to sign up to the system by 1 July this year. In addition to the geographic expansion of the initiative, the Eurasian Economic Commission, the EEUs executive, is also looking to extend the use of RFID technology into other product categories simultaneously, plans are under consideration to expand its geographic reach still further, with the system ultimately seen as covering a range of product categories across a footprint that stretches from Central Asia to the EU border and from the Baltics to the Russian Far East.
Pakistan’s minister of state for finance Rana Muhammad Afzal Khan invited Japan to assist Pakistan to promote its textile through Preferential Trade Agreements (PTA) during a meeting with ambassador of Japan Takashi Kurai. Rana said Pakistan highly values its relationship with Japan. He hoped the economic cooperation between the two countries would be brought to a much higher level with the passage of time. The minister said Pakistan offers numerous opportunities to potential investors from Japan and they can invest in tourism, processing and packaging of sea food, halal food and its export.
Kurai praised the efforts made by Pakistan to eradicate extremism and strengthening of economy. He said the Japanese government has planned to support Pakistan in export promotion, improvement of security through the provision of security equipment at the airports and diversification of automobile industry. The ambassador asked the minister to participate in the EXPO 2025 to be held in Kazakhstan.
He suggested that the Joint Government Business Dialogue process between the two countries should be revived for the benefit of both the countries. The minister assured the ambassador of all possible support from his side.
Latest figures issued by the Pakistan Cotton Ginners Association say higher cotton production in the Sindh and Punjab provinces helped Pakistan improve its overall cotton output by 7.16 per cent year-on-year up to Dec 31. However, production level remained lower than the official revised estimate of 12.6 million bales. The country produced 11.11m bales against 10.36m bales in the corresponding period of the last season. The government initially estimated that cotton production would be 14.1m bales because of the higher acreage of land under cultivation, but the cotton crop faced many issues.
Heavy rains affected the crop, next a heat wave stunted growth of cotton plants. Pest attacks in many cotton-growing areas of Sindh and Punjab further took its toll. Sindh continued to record a higher production growth than Punjab. During the period under review, Sindh showed a growth of 12.38 per cent to 4.21m bales while Punjab recorded a growth of 4.2 per cent to 6.89m bales.
Cotton prices soared to the seven-year high of Rs 8, 100 per maund as against Rs 14, 000 per maund in 2010-11 amid a worldwide surge in commodity prices.
Spinners tried to import cotton in large quantities earlier in the season, however, they shifted track to local cotton as world prices surged. As a result, spinners purchased 9.56m bales as against 8.82 million bales last season. Exporters also purchased 0.21m bales as against 0.12m bales that they bought in the corresponding period of the previous year.
Ginners are holding unsold stocks of 1.33m bales compared to 1.35m bales a year ago. Of 609 ginning units still operating in the country, 446 are in Punjab and 163 are in Sindh. Cotton production in Pakistan is integral to the economic development of the country. The nation is largely dependent on the cotton industry and its related textile sector, and the crop has been given a principal status in the country.
At a recent meeting, Lenzing’s board reappointed Stefan Doboczky as its Chief Executive. His new contract begins on June 1, 2018 and runs till the end of 2022. Doboczky joined Lenzing, a provider of premium cellulose fibres. The company is based in Austria. Hanno Bästlein, Chairman of Lenzing’s supervisory board said, “In recent years, Stefan Doboczky and his colleagues on the management board have been able to make excellent use of the favourable market conditions on the basis of the previous restructuring in order to transform an Austrian company with foreign investments into a truly global player with strong Austrian roots.”
In addition to Doboczky, the management board consists of Robert van de Kerkhof, Chief Commercial Officer; Thomas Obendrauf, Chief Financial Officer; and Heiko Arnold, Chief Technology Officer. Last year, Lenzing announced it was opening a new Tencel fibres facility in Mobile, Ala. When open in 2019, it will be the largest Tencel fibre factory in the world.
The Association of Italian Textile Machinery Manufacturers ACIMIT, and the Italian Trade Agency for the promotion and internationalisation of Italian businesses abroad, will be organising an exhibition at the upcoming edition of Techtextil Russia, the specialized trade fair dedicated to technical textiles and nonwovens, to be held in Moscow from March 20 to 23, 2018. Around 22 companies will showcase their wares at Italy’s exhibition space, including ACIMIT members like: Beta, Bombi, Bonino, Cibitex, Cognetex, Durst, Fabotex, Fadis, Ferraro, Guarneri, Mcs, Cosmatex, Pugi, Ratti, Reggiani, Salmoiraghi, Sariel, Santex Rimar Group, Smit, Sicam and Tessil Gomma.
The trade fair takes place at a time when Russia’s textile sector is growing. Russian authorities have initiated pilot projects specifically targeting the modernisation of existing technology in the textile sector and increasing the supply of local products in the Russian market. The production of technical textiles, in particular, is deemed by competent government authorities to constitute a driver in reviving the fate of the Russia’s textile industry.
As ACIMIT president Alessandro Zucchi says the restructuring phase provides an opportunity to further strengthen existing relations between Russian textile manufacturers and Italian technology suppliers, which are already in good stead, thanks to the promotional initiatives launched by ACIMIT and the ICE-Agency over the past few years. The result of this interaction between Italy’s textile machinery manufacturers and Russian producers is the Russian market’s constant presence among primary destinations for Italian exports of textile machinery.”
In 2016, Italy exported €22 million worth of textile machinery to Russia, whereas figures updated to the first seven months of 2017 show a 51 per cent increase compared to the same period for 2016, for a corresponding value of €11 million. ACIMIT represents an industrial sector comprising around 300 manufacturers (employing close to 12,000 people) and producing machinery for an overall value of about €2.7 billion, with exports amounting to more than 85 per cent of total sales.
Over the last decade, denim manufacturing saw 15 per cent CAGR. Currently, the industry has an annual installed capacity of 1.5 billion meters, which is the world’s second largest after China. Sales turnover is estimated at Rs 15,000 crores. The industry gives direct employment to four lakh workers, excluding indirect employment. Currently, the total number of denim fabric mills operating in the country has touched 46 as against 30 mills in 2012, an increase of 50 per cent. The installed denim fabric production capacity has also increased from 800 million meters in 2012 to 1,500 million meters with a capacity expansion of 150 million meters.
The current domestic consumption of Indian denim fabric is 750 to 800 million meters, growing at an annual rate of 12 per cent. Further, denim fabric exports are estimated at 200 million meters. As per the Ministry of Commerce records denim exports for 2016-17 were $316 million, registering a total of 11 per cent as against 2014-15 which it was $355 million.
DMA Chairman, Sharad Jaipuria warns, “Post-GST, the denim industry has temporarily closed down 30 to 40 per cent capacity across the board and at present is operating at 60 to 70 per cent capacity due to slowdown in demand and over-capacity in the industry. If the present trend continues there can be more production cuts,”
And Akhilesh Rathi, Director, Bhaskar Denim says besides over capacity, the industry has also been paralysed due to the reasons that denim needs to be cut, sewn and washed before it can be marketed. These upstream activities are majorly done in the unorganised sectors located at the SSI hubs of Gandhi Nagar and Tank Road in Delhi, Ulhasnagar in Mumbai and Bellary near Bangalore. These hubs mainly slowed down due to the liquidity crunch in the economy post demonetization and the slow acceptance of GST by small players to become part of the formal economy. As almost 85 per cent of the fabric is sold in the domestic market, denim mills are badly hit.
Amit Dalmia of R & B Denims feels since upstream activities of garment sewing and washing in SSI hubs will take a while before they change for working smoothly with the formal banking system, we are not foreseeing any short-term recovery of the market. This has led to shutdown / slowdown of many denim mills and loss of jobs in this industry.
