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Pakistan hopes to sign the second phase of the Free Trade Agreement (FTA) with China in April. Under the first phase of FTA, Pakistan’s trade balance with China worsened, and it registered the $12 billion mark in the last financial year 2016-17.
In February 2018, China had agreed to revise the FTA and provide tariff concessions for increasing Pakistan’s exports. Pakistan had suggested incorporating clauses for safeguarding its industries and the economy from any undue pressure on the balance of payments position. Pakistan exporters wanted tariff concessions equivalent to Asean countries. China also agreed on electronic data exchange, which would help reduce the chances of under-invoicing, another major concern of Pakistan’s industry.
Pakistan’s major exports to China are: cotton yarn, chemical material, crude vegetable material, rice, raw hides and skins, fish and fish preparations. Major imports are machinery and spare parts, manufactured fertilizer, yarn and thread of synthetic fiber, iron and steel, chemical materials and products, vegetable and synthetic textile fiber, road vehicles and their parts, non-ferrous metals, tires and tubes of rubber etc.
Meanwhile China is helping Pakistan's spinning mills become more cost efficient and competitive. China also wants to relocate its textile units to Pakistan to benefit from Pakistan’s low paid and well-experienced textile labor.
Authentic Brands is buying Nautica from VF Corp. VF Corp has a varied portfolio of lifestyle brands such as Vans, The North Face, Timberland, Wrangler and Lee. The sale is s part of VF’s global business strategy.
Founded in 1983, nautical-inspired American brand Nautica is a mid- to high-end apparel label available in more than 65 countries. Nautica is a leading water-inspired global lifestyle brand including men’s, women’s and children’s apparel and accessories and a complete home collection. Nautica products are classics that are rich in performance, color and authentic style.
The transaction is expected to close in the first half of 2018 but is subject to standard closing conditions and regulatory approvals. Authentic Brands manages more than 30 global consumer brands and operates through over 2,300 locations worldwide. Its portfolio includes: Juicy Couture, Herve Leger and Airwalk. Authentic is a brand development, marketing, and entertainment company, which owns a global portfolio of lifestyle, celebrity and entertainment brands. Headquartered in New York City, the group manages, elevates, and builds the long-term value of consumer brands by partnering with best-in-class manufacturers, wholesalers, and retailers. Its global retail footprint spans the luxury, specialty, department stores, shop-in-shops, e-commerce, mid-tier, and mass channels.
Lenzing Group is repositioning its brand Tencel. This is a key milestone of Lenzing’s new brand strategy to enhance product offerings, foster connection with customers and consumers, and drive consumer demand. Under the new brand strategy, Tencel Modal and Tencel Lyocell fibers will be key ingredients in the Tencel branded product portfolio. Derived from certified wood sources, both Tencel Modal and Tencel Lyocell standard fibers are produced via responsible production processes and are compostable and biodegradable under industrial, home, soil and marine conditions.
Textiles produced under the Tencel brand are also enabled by the company’s innovations, including Refibra technology, Eco Soft technology, Eco filament technology and Micro technology, to meet evolving consumer demand. While Lenzing Modal is known as a fiber with good quality and long-lasting softness, Tencel is a well-recognised brand among stakeholders, customers and consumers in key target regions of Lenzing. Hence, Tencel is adopted as Lenzing’s textile specialty brand for apparel and home applications and is aimed to help create a unique and differentiating brand in the Modal and Lyocell fiber markets.
As Lenzing's flagship brand in the textile sector, Tencel will grow beyond fiber types and functional characteristics. It will become a true consumer-focused brand with a promise of something more functional and emotional.
Pakistan’s textile value-added products are unable to fetch a high value due to poor packaging. The industry says a product and packaging centre will ensure better packaging. Since fabrics are in limited supply, the garment sector in Pakistan has a restricted product line for the export market. Foreign buyers demand garments made of technical fabrics, which are not available or produced by Pakistani weavers.
The industry says it can’t compete in the global market without support or a proper plan. Exporters say formulation of sector-wise policies can control the decline and stabilise exports. Refunds are another problem. Sales tax refunds and customs rebates are pending. Exporters complain of cash liquidity and say this is the main cause for the continuous drop in exports and the reason the export industry is unable to tap its potential in accordance with capacity.
Garment manufacturers and exporters have called for an aggressive marketing plan to enhance exports and get the maximum benefit of GSP Plus status. Pakistan’s textile industry has witnessed dwindling investments over the last decade. Currently, around 35 per cent of the textile industry’s production capacity is impaired.
Prospective investors are reluctant to make new investment decisions due to the high cost of doing business. As a result, the industry has lost its technological advantage over its competitors.
India and Hong Kong have entered into a double taxation avoidance agreement. This is aimed at stimulating the flow of investment, technology and personnel from India to Hong Kong and vice versa, preventing double taxation and providing for exchange of information. It will improve transparency in tax matters and help curb tax evasion and tax avoidance.
Investors will get an advantage of a lower withholding tax of 10 per cent on interest or royalties provided they fulfill the main purpose test, which broadly checks that the transaction is not entered into specifically to avoid taxes. It also provides for capital gains taxation of indirect transfers. It provides that gains from sale of shares of a company deriving more than 50 per cent of its value from property situated in a country will be taxed in that country. There are exemptions for airline and shipping companies.
Hong Kong is an important financial and trading partner and the absence of a treaty was a hindrance. Now things are expected to move forward. The agreement is expected to give protection against double taxation to over 1,500 Indian companies and businesses that have a presence in Hong Kong as well as to Hong Kong-based companies providing services in India.
Gap is undertaking water conservation with a new sustainable manufacturing goal to save 10 billion liters of water by the end of 2020. The goal would yield water savings equal to the amount of daily drinking water needed for 5 billion people. The company stated efficiency improvements and product innovation would be critical to achieving the potential water savings.
Gap’s new manufacturing goal is part of its water stewardship strategy that focuses on reducing environmental impact at the raw materials and product design level, in addition to helping communities touched by the company’s efforts to improve clean water accessibility and sanitation processes. Over the past few years, Gap Inc. has also elevated water efficiency improvements at the mill, laundry and product level.
Gap is actively monitoring wastewater quality at denim laundries through its Water Quality Program, an initiative launched in 2004 that ensures denim laundries’ wastewater is properly treated. To improve its denim products, the Gap brand established a denim wash program dubbed Washwell, which reduces water use by 20 percent or more. Since launching the program in 2016, the Gap brand has saved more than 100 million liters of water.
The company is also working with other leading authorities to support more environmentally responsible manufacturing processes. The company’s Women and Water program is working to help communities boost clean water accessibility and sanitation. In 2014, the company integrated its water, sanitation and hygiene curriculum into its P.A.C.E. program that educates female garment workers about safe water-handling practices.
Since 2014, Gap projects have worked to conserve more than 2.4 billion liters of water and progress toward the new goal is under way due to improvements in clean water access, product design and material sourcing.
From futuristic denim technology brands like e-indigo, chrome chord, hybrid chinos to handloom ones like ikat — denim is witnessing a revolution in terms of design aesthetics and accessibility to cater to the evolving mentality of customers.
A wash trend collection has been developed at Arvind Denim Lab using eco-friendly technologies and processes. E-indigo, an innovative line, uses a new indigo dyeing technology, which is not only substantially more sustainable compared with traditional dyeing techniques, it also imparts a fresh appeal to the finished product.
Levi Strauss has devised a new operating model that ushers denim finishing into the digital era. Project FLX (future-led execution) digitizes denim finish design and enables a responsive and sustainable supply chain at an unparalleled scale. By replacing manual techniques and automating the jeans finishing process, Project FLX radically reduces time to market — and eliminates thousands of chemical formulations from jeans finishing.
Using this method Levi Strauss can replace manual techniques and automate the time-consuming, labor-intensive and chemical-reliant process of hand-finishing. By using lasers in new ways, finishing time is cut dramatically – from two to three pairs per hour to 90 seconds per garment, followed by a final wash cycle. Levi Strauss has begun piloting Project FLX with select vendors and retail partners and will roll it out across its supply chain in a phased approach over the next two years.
"Manchester used to be the hub of Britain’s textile trade even before it became a hub for fast fashion. Boohoo, Missguided and In The Style are just some of e-tailers headquartered there today but at the time of the Industrial Revolution, the city’s red-brick buildings were home to cotton mills. Like every country, mills started shutting down one after another as retailers found cheaper alternatives to British cotton in India and China."
Manchester used to be the hub of Britain’s textile trade even before it became a hub for fast fashion. Boohoo, Missguided and In The Style are just some of e-tailers headquartered there today but at the time of the Industrial Revolution, the city’s red-brick buildings were home to cotton mills. Like every country, mills started shutting down one after another as retailers found cheaper alternatives to British cotton in India and China. The last mills closed its doors in early 1980s but after years of absence, cotton spinning has now returned to Manchester.
Following a £5.8 million investment – £2.8 million of its own investment, £2 million from the Greater Manchester Combined Authority’s investment fund and £1million from the government’s Textiles Growth Fund – technical textiles company Culimeta-Saveguard launched English Fine Cottons in 2015. Test production at its Dunkinfield mill started in July 2016 and in last December, it opened for business. Tracy Hawkins, Business Development Manager, Dunkinfield says while they didn’t start the factory with the intent to revive the UK textile industry, a lot of thought went into opening the mill and they thought it was a good investment because of changes in the market. The project came to fruition just before Brexit. Retailers are worrying about the cost of bringing in raw goods from overseas while exchange rate is another concern. The exchange rate works in their favour when they are selling abroad and there are a lot of international markets, particularly Japan, that are interested in British heritage and quality.
Growing cotton production
The campaign ‘Make it British’ found average production was up 25 per cent and half of the 100 fashion and textile manufacturers surveyed recoded a turnover increase in 2017 compared to 2016. However, Britain’s decision to leave the European Union could provide a further boost. Kate Hills, a former buyer for Marks & Spencer and Burberry and founder, Make it British, says Brexit is an opportunity for textiles reshoring. Locally sourced yarn means retailers aren’t at the mercy of currency fluctuations or economic disasters in cotton-sourcing countries, and everyone is looking for less trouble in their supply chain. However, the biggest challenge is still finding the right skills. Hawkins points out it is the quality of the mills’ cotton, rather than speed to market, that proved to be the biggest draw for brands and retailers.
Data suggests there are opportunities for British textiles but there is still a long way to go before the scale of the industry can match up to its counterparts. Currency swings and the opportunity to have a stronger grip on supply chains make UK textiles tempting for retailers but higher prices, skills gaps and the industry’s small scale are still posing problems.
Faced with fierce online competition from the likes of Amazon affordable fashion giants Zara and Hennes & Mauritz AB (H&M) are shoring up their defenses, trying to use their stores to boost Internet sales. Separated by thin partitions, 15 little photography studios are used exclusively to update the Web site line-up in a corner of Zara’s huge headquarters near Corunna in Spain’s northwest.
Under a constant barrage of camera flashes, models strike pose after pose to get seven photos showing the piece of clothing under all angles. In total, 1,500 photos are put online twice a week to match the speed at which articles of clothing are replaced in-store.
Last year, these represented 10 per cent of sales, a figure unveiled last week after years of secrecy over a crucial sector that Inditex only entered in 2010, on the late side. Gaining more visibility online was the main challenge for Inditex if it wants to remain competitive in the long term, says IG Markets analyst Sergio Avila Luengo. The retail giant started having trouble clearing stocks for the first time last year due to competition from Amazon.
On its part, Sweden’s H&M has recognized that a drop in profits last year was due in large part to online competition. Faced with this threat, H&M devoted 45 per cent of its investment to Internet sales last year, or about €600 million, for a new photography studio and personalized apps for its clients.
Inditex has opened 19 warehouses in the world dedicated to online sales. H&M is soon to follow suit. Both are also taking advantage of their thousands of stores, including for client delivery. Both groups are implementing systems to avoid missing out on a sale if for instance the size is not available for a customer, by pointing the customer to the item online. Their strategy was to combine both sales methods, says Gildas Minvielle, head of the economic observatory at the French Fashion Institute.
A two-day World Trade Organization (WTO) informal ministerial meeting is being held in India. The objective of the ministerial meeting is to facilitate an informal and frank exchange of views on the agenda for negotiations at the WTO as well as institutional issues. Participants could also discuss any other theme of common interest to all members.
India seeks guidance on the future of the multilateral trading system amid attempts by the US to undermine WTO rules, raising fears of trade wars. The decision of the US to raise tariffs on steel and aluminium beyond its commitment under the WTO on the grounds of security is expected to dominate discussions at the meeting.
India has termed the move discriminatory and demanded an exclusion as granted to key allies of the US such as Canada and Mexico, while the European Union has threatened to retaliate by hiking tariffs on a set of goods it imports from the US. The US has started systematically undermining the WTO. The rules-based system that drives WTO through the dispute settlement mechanism is now being threatened by the US.
The US wants to go back to the pre-WTO system where abiding by a verdict of the dispute settlement mechanism was not binding and the winning country had to sit down and negotiate with the losing party, which could end up giving more powers to large developed countries to arm-twist their small economic partners.
