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A ranking system that scores apparel brands and other organisations on their use of sustainable cotton will be widened for this year. Pesticide Action Network (PAN) UK, Solidaridad and WWF have released the list of companies that will be assessed in the new round of their Sustainable Cotton Ranking. to be published in October 2017.
The second edition of the ranking will include major companies from all continents including from countries such as China and Brazil and online companies such as Zalando and Amazon. As in 2016, the ranking will score companies on their policy, traceability and uptake of sustainable cotton.
In the first report, which was published in June 2016, IKEA Group, C&A, H&M, and Adidas, were ranked highest while VF Corp and Kering scored less in the report which judged brands primarily on their use of organic cotton. Fairtrade cotton, cotton made in Africa (CmiA) and Better Cotton Initiative sourced cotton.
Solidaridad said the target list of companies has been expanded to offer a more global representation of consumer-facing companies estimated to use more than 10,000 metric tons of lint cotton annually and include companies from emerging markets and online retailers. It added that creating a list of the largest corporate cotton users is challenging as most companies do not publish the volumes they use in their products.
The first Cotton Ranking claimed most companies using variable cotton globally were failing to deliver on cotton sustainability, with just eight companies out of 37 showing positive progress in the ranking. By conducting a second Cotton Ranking in 2017, PAN UK, Solidaridad and WWF said they expect to see that more companies have taken steps forward on their sustainable cotton policies, traceability and sourcing. The report will also include a market update on the available supply and uptake of cotton from the main cotton sustainability standards (organic, Fairtrade, Cotton Made in Africa and Better Cotton).
Giving importance for thrust areas, the Union Budget and Railway Budget were presented together and announced as a single budget for the first time in Indian history. Another special feature of the budget was that it merged planned and non-planned expenditure that would enable different ministries to get proper allocation for meeting the expenditure. The Transform, Energize and Clean India (TEC India) vision with ten point agenda set by the Government to frame the Budget would enable the nation not only to grow at a faster rate, but also achieve a sustained growth rate.
In a press release the chairman of the Southern India Mills’ Association (SIMA) M.Senthilkumar has welcomed the Union Budget 2017-18 and termed it as a growth oriented budget that would enable all the manufacturing sectors to grow at a faster rate and the people of the nation to improve their standard of living.
Training of the youth by establishing 100 India International Skill Centres, Development of Infrastructure to provide end-to-end solution by integrating road, rail and amp; would greatly benefit the textile industry that is spread across the nation, the chairman of SIMA said.
Senthilkumar has stated that the main demand of the Association of continuing the existing tax structure including the service tax and optional Cenvat route extended for textile industry till the GST is implemented has been considered in the Budget. The other benefits extended such as 5 per cent reduction in the tax for MSME industrial units, additional allocation to the banks for NPA accounts, cashless transaction, labour reform, relaxation of FDI norms by abolishing Foreign Investment Promotion Board (FIPB) would also benefit the textile industry. The cluster approach for contract farming would greatly benefit the predominantly cotton based textile industry, according to SIMA chief.
He has hoped that the textiles being a mass consumption item, the Government would consider bringing the entire textile value chain under lowest slab rate of GST (currently announced as 5 per cent) without any exemption to have proper compliance.
The Economic Survey for 2016-17 has said that labour and tax reforms are needed to boost employment creation in apparel and leather sectors as the two segments can become vehicles for broader social transformation in the country today. Noting that in both apparel and footwear sectors, tax and tariff policies create ‘distortions’ that impede India gaining export competitiveness, the Survey said that there is a need to undertake ‘rationalisation’ of domestic policies which are inconsistent with global demand patterns.
The Survey notes that India has an opportunity to push exports from apparel and leather sectors since rising wage levels in China have resulted in China stabilising or losing market share in these products and has recommended labour and tax reforms to make the country globally competitive. Apparel and Leather & Footwear sectors are eminently suitable for generating jobs that are formal and productive, providing bang-for-buck in terms of jobs created relative to investment and generating exports and growth, as per the Survey, which was tabled by Finance Minister Arun Jaitley in Parliament today.
However, it observes that the space vacated by China is fast being taken over by Bangladesh and Vietnam in apparels; and Vietnam and Indonesia in case of leather and footwear, while Indian companies struggle in face of a set of common challenges related to logistics, labour regulations, tax and tariff policy and disadvantages emanating from international trading environment compared to competitor countries.
An FTA with EU and UK in the case of apparel will offset an existing disadvantage by India’s competitors like Bangladesh, Vietnam and Ethiopia, the Survey notes. In case of leather and footwear, the FTA might give India an advantage relative to competitors. In both cases, the incremental impact would be positive,” it maintains.
The introduction of GST offers an excellent opportunity to rationalise domestic indirect taxes so that they do not discriminate in apparels against the production of clothing that uses man-made fibers, the Survey observes.
In a swift move, Swedish fashion retailer H&M dropped on Tuesday a decades-old store growth target in favour of a turnover one to reflect growing online sales. This after it reported a minimal increase in pre-tax profit for the September-November period.
Unexpectedly, the pre-tax profit in H&M's fiscal fourth quarter rose following five consecutive quarters of dwindling profits to 7.4 billion crowns ($839 million) from a year-ago 7.2 billion. Analysts had on an average forecast a 2 per cent fall to 7.0 billion.
H&M said its new target is to increase local-currency sales by 10 to 15 per cent annually with continued high profitability. Here it must be mentioned that the retailer has struggled with increasing competition in the budget segment while investments in IT and new concepts as well as large markdowns have dented margins and profits.
H&M, that had earlier unveiled a weaker than-expected turnover for the fiscal quarter as well as for December reported that sales in January 1to 29 were up 11 per cent in local currencies. The company said that it would open 430 new stores this year, a plan at the bottom of the range of its earlier expansion target of 10-15 per cent new stores annually. It said it would roll out e-commerce in Turkey, Taiwan, Hong Kong, Macau, Singapore and Malaysia, taking its online markets to 41.
Though the fashion industry and technology haven't traditionally amalgamated well, but Gap is looking to change that. The parent company Gap Inc., which also owns Old Navy and Banana Republic, is launching a new augmented reality app called ‘DressingRoom’. As in-store sales drop in favour of online orders, retailers are looking for new methods to engage their shoppers.
Built in collaboration with Google and start-up Avametric, the app will allow one to virtually try on clothes anywhere he/she goes. Users first enter information like height and weight, then the app places a 3D model in front of them. The model can try on different clothing items to see how they would look with that particular outfit. If one looks like how they look, the clothes can be purchased from the app as well.
Though the app is to launch in a few days, but it still is in its early stages. It currently only works with Google Tango enabled smartphones of which only the Phab 2 Pro from Lenovo is available. Besides this technical limitation, the app only shows what the clothes would look like. In order to get the fit and feel for the garment, a traditional dressing room is still the only option. Pokémon Go was the first highly successful augmented reality app, but Gap and other clothing retailers are hoping to grow the market. Time will tell if this kind of app can help retail with declining sales.
A new research from China has claimed that the country has been partly successful in de-coupling the growth of its textile industry from increases in water consumption and discharge. The researchers claim this is due to the better use of technology and water saving methods and stronger environmental laws in China.
The researchers found that the water footprint of China's textile industry strongly decoupled from the growth of its textile industry for five years (2002, 2006, 2008, 2011, and 2013) and weakly decoupled for four years (2002, 2007, 2009, and 2010) over the period 2001-2014. The researchers calculated changes in blue water (water consumption), grey water (water pollutants), and water footprints of the textile industry from 2001 to 2014. Later, the relationship between water footprint and economic growth was then examined.
Over the entire period, there was a slight decoupling trend which the researchers indicate was due to the better use of technology and a growth in the amount of water saving methods being employed by the textile industry. The concept of decoupling indicates the reduction of a mutual relationship between two or more physical quantities. Decoupling analysis is widely applied in studies of economic growth in relation to resource consumption and environmental pressure.
The research paper says that the decoupling trend as a whole was good but the development of the textile industry was not completely independent of the water footprint. In general, during the sampling period, China's textile industry has controlled the amount of wastewater discharge and achieved significant effects on wastewater management.
Mumbai based textile manufacturer, Century Textiles has declared its unaudited financial results for the quarter ended on December 31, 2016. Following are the excerpts from the Q3 results:
Net profit stands at Rs 13.9 cr vs loss of Rs 8.5 cr (YoY); Total income recorded is down by 7.2 per cent at Rs 1962 cr vs Rs 2114.4 cr (YoY); EBITDA is up by 36.5 per cent at Rs 214 cr vs Rs 157 Cr (YoY); and EBITDA margins stand at 10.9 per cent vs 7.4 per cent (YoY). The stock is trading flat with mixed sentiments after the Q3 results, witnessing spurt in volume by more than 1.41 times in Tuesday’s trading session.
Century Textiles & Industries Ltd is currently trading at Rs 857, up by Rs 0.5 or 0.06 per cent from its previous closing of Rs 856.5 on the BSE. The scrip opened at Rs 860.4 and has touched a high and low of Rs 870 and Rs 841.9 respectively. So far 2282464(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs 9566.73 crore.
The BSE group 'A' stock of face value Rs 10 has touched a 52 week high of Rs 1037.25 on 01-Nov-2016 and a 52 week low of Rs 403.8 on 29-Feb-2016. Last one week high and low of the scrip stood at Rs 862.8 and Rs 817 respectively. The promoters holding in the company stood at 47.75 per cent while Institutions and Non-Institutions held 23.21 per cent and 29.03 per cent respectively. The stock is currently trading above its 100 DMA.
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has urged factory owners not to display photos of the workers sacked or suspended for their alleged involvement in labour unrest. It may be remembered that in December last, factory owners fired or suspended 1,600 workers for their alleged links to unrest in the manufacturing hub of Ashulia.
Some companies posted pictures of those employees on factory walls for easy identification, claimed Siddiqur Rahman, president of BGMEA. This suspension and subsequent identification of those workers were later heavily criticised by rights groups both at home and abroad. The BGMEA chief was speaking at an emergency press conference at the association's office in Dhaka to discuss the current situation as a volatile global situation and some domestic challenges are having an impact on the sector.
Rahman requested the concerned factory owners not to display the photos of terminated or suspended workers as the law doesn't support this practice. As the units resumed operations after two weeks of deadlock, all suspended and sacked workers have been given their dues and salaries as per the labour law, he observed.
The growth of garment exports from Bangladesh declined 3.53 per cent year-on-year in December last year due to a volatile global situation coupled with domestic challenges including the chronic crisis of gas and power. Additionally, Brexit, currency swings and the US elections did impact apparel exports from Bangladesh, Rahman said.
In July-December this fiscal year, garment exports grew only 4.37 per cent year-on-year to $13.7 billion; at least 12.25 per cent annual growth is required to achieve the export target of $50 billion by the end of 2021. Garment shipments to the UK, the third largest export destination for Bangladesh decreased 5.19 per cent as demand weakened in early signs of Brexit's impact on the British economy.
"The draft proposal of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Version 2.0 also includes ‘Sustainable Development Goals’ as a part of a bigger agenda in the RMG landscape with the help of development partners. ‘Version 2.0’ comprising of the government, BGMEA, ILO, trade unions and global brands, is likely to replace the two buyers’ groups Accord and Alliance when their readymade garment sector safety initiatives expire in July next year."
The draft proposal of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Version 2.0 also includes ‘Sustainable Development Goals’ as a part of a bigger agenda in the RMG landscape with the help of development partners. ‘Version 2.0’ comprising of the government, BGMEA, ILO, trade unions and global brands, is likely to replace the two buyers’ groups Accord and Alliance when their readymade garment sector safety initiatives expire in July next year.
The new initiative, however, will delete the terminology ‘legally binding’ from the present article of Accord and Alliance when it comes into force. The BGMEA formed a five-member committee in October last year to develop a strategy to cope with the situation following the expiry of the Accord on Fire and Building Safety in Bangladesh, the platform of European buyers, and the Alliance for Bangladesh Worker Safety, the platform of North American buyers, in 2018.
Work in progress
The committee recently prepared some articles of association for new initiative saying that the steering committee of Version 2.0 would be constituted with representations of BGMEA, ILo, Department of Inspection For Factories and Establishments, trade unions and brands. The steering committee will appoint a qualified CEO to oversee the operations of Version 2.0.
Under the new initiative, factory assessment would be done on an individual basis and due to failure of remediation in any particular unit would not impact other production units belonging to the same group. Laws of land will be applicable regarding closure of factories, compensation to the workers and penalty to the factory owners, the draft strategy said. As per the BGMEA draft, Version 2.0 will be registered in Bangladesh under the relevant act.
Slated timelines
It proposed that for the initial period (June 2018–June 2020) signatory buyers will continue their contributions but at a reduction of 50 per cent of the annual dues that they have been paying in to the Accord and the Alliance since 2013 as the vast majority of remediation will have been completed and only some follow up would be pending. From 2021, Version 2.0 will become fully self-financing and contributions by brands would be discontinued, the draft said.
Enhancing safety
The BGMEA committee proposed that third-party auditors, having prior experience on audit and certification with the Accord and the Alliance, will be hired for conducting all structural, fire and electrical audit and the new factories will have to pay for their inspections based upon the square footage of their facility. Through credible safety inspections of the new factories and monitoring of the old ones would be carried out by skilled personnel based on internationally recognised workplace safety standards and national standards.
It may be recalled that after the Rana Plaza building collapse, which killed more than 1,100 people, mostly garment workers, in April 2013, North American retailers, including top brands Walmart and Gap, formed the Alliance and European retailers formed the Accord undertaking a five-year plan, which set timeframes and accountability for safety inspections and training and workers’ empowerment programmes.
The Accord has so far conducted initial inspections at 1,600 factories while the Alliance inspected 759 factories. At the same time, under the National Action Plan (NAP), the Bangladesh Government with the collaboration of the International Labour Organisation (ILO) inspected around 1,500 factories.
During the inspections, 148 factories were sent to a government-set review panel for the decision as the inspection teams found critical safety issues in the units. Of the 148 factories, the review committee, which is comprised of representatives from the government, Accord, Alliance, Bangladesh University of Engineering and Technology and the BGMEA, shut down 37 factories while closed 42 units partially.
Marking the best rally of cotton in six months, Chinese buyers have, this year, committed to purchase almost five times more American cotton than at this time last year, the US government has said in a report. With the pledge, the price of the commodity is heading for its biggest monthly advance since July last year. Hedge funds are positioned for more gains, holding the second-most bullish wager ever.
American growers are expected to ship the most cotton since 2013, data from the USDA reveal. Sales growth is being driven by purchases in Indonesia and Vietnam as well. While rising demand has sparked two straight years of rallies, futures in New York are still trading about 65 per cent below a record set in 2011, leaving the fiber at affordable levels for consumers.
The net-long position in cotton rose 3.2 per cent to 87,341 futures and options in the week ended January 24, a data published by the U.S. Commodity Futures Trading Commission three days later show. That was just shy of an all-time high of 90,215 contracts set on January 10, according to the figures, which go back to 2006.
Cotton traded on ICE Futures U.S. in New York climbed 2.5 percent last week. Prices added 0.3 per cent to 75.06 cents a pound on Monday and are up 6.2 per cent this month. Futures touched 75.37 cents on January 5, the highest since August.
Consumption will probably outstrip production by 1.24 million metric tons this year, Cotlook, a Birkenhead, England-based research company, said last week. That can help to erode global stockpiles, which the USDA estimates at 90.6 million bales, each weighing 480 pounds (218 kilograms).
